How Would A Biologist View White Collar Crime And "Control Fraud" ... And Suggest How To Handle Them?

Why ask this question, and many more like it?

Control Fraud and White Collar Crime, as coined by sociologists and criminologists, are useful yet neglected concepts.

What if there are diverse concepts from many other systemic disciplines that are of equal or greater value, yet even more neglected?

If all citizens periodically hear a bit more of what all other citizens know, we'd never have to worry about our democracy?

To get that benefit which history has promised, we first have to condition ourselves to want to know what more of our co-citizens know.

So in case YOU want to know, let's compare some views across disciplines, and see what pops out.

For non-criminologists, what is White Collar Crime ... especially "Control Fraud?"

It's useful to google both terms, and see the variety of illuminating examples illustrating both terms.

"The persons who control a seemingly legitimate entity (private, non-profit, or governmental) can cause unique damage [to the aggregate] if they engage in fraud because the CEO can direct the corporation and cause it to make the firm’s internal and external environment vastly more criminogenic." 

"... the CEO’s interests are frequently contrary to the interests of the corporation" 

"The elegant solution for the fraudulent CEO is not to defeat controls but rather to suborn them and pervert them into the most valuable fraud allies. This explains why sophisticated frauds almost invariably retain top tier auditors to “bless” the financial statements."

These quotes are taken from Bill Black's essay,

75th Anniversary of Edwin Sutherland Naming 'White-Collar Crime'

So, what might all this mean, systemically, to all 315million members of our democracy? Is this cross-discipline sharing of terms and concepts useful for all?

These concept of White Collar and Control Fraud crimes are not only a rehash of ancient tyrant/civil conflict, and not just a review of Marxist/aristocracy conflicts.

To biologists, these concepts are also the real-time noise of host/parasite interactions, where some of the emerging elements in a deeply nested system are always harming rather than helping the system that spawns them. Yes, in the course of spawning their own diversity, biological systems spawn internal parasites, and must constantly invent completely novel methods to regulate and/or cull the mal-adaptive processes, as part of selecting the adaptive fraction.

In short, to any system scientist, "parasitic" members of an internal characteristic-spectrum are those system components NOT YET REGULATED or tuned to adaptive system purpose.

When citizens and criminologists discuss fraud & crime in specific industries, they're talking about diverse expression of similar, not-yet-regulated behavioral excesses. Those behavioral excesses are just applied in different segments of our vast, cultural INTERACTOME, precisely because more adaptive tolerance limits are not yet hemmed in by more evolved regulatory interactions.

How are optimal tolerance limits developed sooner rather than later? By practice at sampling all available feedback and getting good at adaptive_signal/system_noise discrimination. We know that no system ever knows best/worst utilization of emerging resources beforehand, since that utilization is always entirely context-specific. So how does a growing human culture figure that out, as it simultaneously spawns new components capable of harnessing new resources?

Not just by totally naive trial and error, but by applying BEST PRACTICES to the timeless methods for parsing adaptive_signal from context_noise.

Best practices are historically shaped by the rule of system extension, i.e., species, culture or national survival. 

That history automatically pre-defines best practice as configuring ourselves to maintain the most degrees of freedom or highest adaptive potential (DOF/HAP) in the existing system or culture, while retaining all that culture's historical momentum and baggage as a foundation stock of diversity to continue using. Short of sterilizing the planet and starting from scratch, we're stuck with extending the biological infrastructure we have, until we prove it as a dead end and get replaced by something else. Basically, we need to do anything to keep triggering a state of mobilization at regular intervals, instead of staying too relaxed for too long.

In species evolution, we call name such self-motivation tricks as "play behavior" among the so-called, more advanced species. Advanced cultures need cultural-play-behavior too, not just personal play behavior.

This train of thought suggests that we can actually confirm Joshua Chamberlain's thesis, and generalize from it. Yes, we cannot predict specific challenges, but we can determine what kind of adaptive rate our culture can spawn when the challenge strikes, by maintaining a high level of play & practice at both spawning diversity and then regulating it upon demand. Chamberlain didn't say how, but we can. By being prepared, through initially playful and then serious practice.

How to be prepared? By being practiced at assessing & optimizing our net adaptive potential (DOF/HAP; degrees of freedom = highest Adaptive Potential).

How to optimize & fine-tune adaptive potential (DOF/HAP)? History mandates optimal quality of distributed decision-making as the key to system extension or survival. That, in turn, mandates optimally distributed degrees of freedom, which mandates optimal distribution of BOTH static and dynamic assets.

Optimal distribution of both static and dynamic assets is rarely discussed, but historically boils down to "force-readiness." Translation: a median living wage AND mandatory requirements for lifelong education, training and industry, including regular practice at system perspective, not just component practice? In the end, culture is a dynamic asset which, like everything else, is something we either use or lose. It cannot be physically hoarded, only maintained through practice.

There are always important portions of system performance which cannot be appreciated through participation alone. Rather, the perspective from the edge or from a distance - as observer, coordinator or coach - is required, to recognize some system patterns which are much more difficult to recognize from within.

In practical terms, this advises us to regularly practice listening to diverse viewpoints, observing our own processes from the outside, and practicing dialectic modeling of everything, to trigger emergence of new regulatory checks & balances. Functionally, dialectic modeling reduces to early practice at examining emerging interdependencies.

What is the fastest way for supra-tribal populations to re-constitute the extreme agility & adaptive rate of tribal pass-through, tribal economies? Simply mandate it. Then practice it's features, by keeping ourselves prepared, by challenging ourselves with a steady spectrum of cultural-play behaviors.  Some of those play behaviors will always transition to serious work options. Self-challenge keeps us on our toes, while waiting for unpredictable outside challenges.

Pursuit of adaptation is a selected conditioning bias, not an inescapable certainty. Every new level of system expansion must not only be spawned, it must start from scratch and thereafter develop yet another set of tools and methods which instil a bias to pursue further adaptation (optimizing DOF/HAP). Such a bias can occur ONLY from the statistics of selection bias! There is no other way to discriminate best/worst resource allocation models.

No wonder systems ONLY advance during crisis, and always decline systemically without systemic selection pressure - reverting to component competition rather than coordinated cooperation.

What does that say about how our electorate orients to our present context?

The quick answer is "horribly" or "barely at all." So let's apply a bandage to our fractured, cultural orientation process.

Making a jump, let's put it this way, and start from scratch.

Tribal systems evolved to the point of running out of room to operate independently, and are still adjusting to all the resulting inter-dependencies. The former, tribal functions, however, maintained a highly selected system of distributed decision-making, which preserved & maximized net degrees of freedom. You can say that a "social" species is one that practices "pass-through" economics to optimize system maneuverability.

Where did "capitalism" come from? One view is that it arose from the onset of supra-tribal politics, where permanent inter-tribal frictions gradually transitioned "temporary" tribal war chiefs into "permanent" aristocracy with the habit of acquiring static assets across formerly tribal boundaries, instead of optimizing tribal capabilities. 

Capitalism is inherently the distributed practice of Control Fraud? 

Because of that view, early attempts to regulate White Collar & Control Fraud crime have focused on keeping it's practice distributed within tolerance limits, rather than reconstituting ancient Public Purpose and formally co-optimizing static as well as dynamic assets simultaneously. To optimize cultural Adaptive Potential, we might want to re-explore civic practice and preparation at agile utilization of all civic resources, aka, mobilization skills or force-readiness.

(You could also argue that allowing extreme wealth and income disparity is just another way of returning to a restrictive gold standard, where excessive amounts of access to public fiat is constrained in the hands of a few. That constitutes Central Planning, by any other name. Any method whatsoever of constraining or slowing, rather than more speedily distributing use of public fiat, is a severe, mal-adaptive constraint on both Policy Space and Policy Agility.)

From that perspective, capitalism is simply an off shoot of an arbitrary approach to acquiring static assets ACROSS system boundaries, while newly supra-tribal aggregates try to figure out how to organize dynamic assets on a new scale. For an aggregate, organizing dynamic assets as fast as it acquires static assets is the key to Adaptive Rate. Only by co-organizing static/dynamic assets can aggregates better discriminate best/worst options for aggregate resource allocation.

Capitalists are routinely taught that adaptation is merely static asset allocation, or simply distributed hoarding. Optimal adaptive "use" of resources is considered separately and transiently, if at all. It is typically viewed by most avowed capitalists as too difficult to do, and is therefore considered both presumptuous and something to be neglected. Unless absolutely necessary. The frequency of war indicates how frequently absolute necessity actually occurs.

The worst application of this new practice of "capitalism?" Instilling the habit of NOT practicing optimization of dynamic assets, and instead settling for an obsessive focus on distributed hoarding of static assets. In short, business capitalism is self defeating, by neglecting the return-on-coordination from it's own INTERACTOME, while progressively seeking to uselessly hoard static assets. That constitutes a transient, unstable, net loss of Adaptive Potential (a growing Output Gap), while components reflexively hoard under-utilized static assets. Capitalism is, in short, a group failure to orient to the far higher return-on-coordination.

We're looking at 2 settings for humans, long familiar to ecologists. 

1) Overgrowth of one species, waiting for some new sub-clone to out-compete all the rest ... simply because it can.

2) Climax ecology, where a stable mix of species co-exist, until unpredictable events clear fractions of the environment & allow a cascade of marginally preserved elements to build toward a new climax "cover crop" mix.

Our only challenge is to more quickly determine how prepared we are to respond, to whatever is going to happen next, no matter when it occurs. The only way to assess our national force readiness, is to practice on invented or "cultural-play" processes. Call them Public Works if you will, but whatever you call them, please just practice?

As we ponder this task, it should occur to all that humans may not be suffering from future shock at all. Rather, compared to our ancestors, humans may be suffering only from FutureBoredom, and need to get busy doing something about it, by first playing en mass, and then turning some fraction of competitive play into real evolution. The alternative is to sit around becoming progressively un-practiced, and thereby becoming less rather than more prepared for unpredictable challenges.

What is Homo Sapiens going to DO with itself? Rates of Exploring Local-vs-Aggregate Options ... and the Fate of Nations.

To answer that, let's first look at a seemingly unlikely context.

Amsterdam Gives Alcoholics Beer to Clean City Streets

And then range up to analogies, such as "USA gives sociopaths power ... to "clean up" social interdependencies."

Before delving too deep, too quickly into taboo subjects, lets practice on the one with less implications. Beer.

I don't know how widely this particular issue was discussed in Holland, but it opens a small, useful window exposing a view of group policy-development methods. Isn't that a window all citizens should look through more often?

It's a bubbling, boiling topic. In the particular case of beer, we've come full circle in the past 100 years, first to Prohibition, then to the opposite extreme. We bounced all the way from tolerance limit to the other. Is there a way to spend more time near whatever intermediate zone is safer?

You have to immediately wonder just how many times throughout history this - and similar - social experiments have been conducted, the results noted - or not - and eventually completely forgotten all over again!

Does that sound familiar, or what? 

It's largely a number problem. Lets say that ~24 grandparents had to learn some lessons the hard way, and that to many of the ~48 or more parents either forget, or never learned those lessons. Can we minimize how many of the ~100 or more grandchildren have to relearn too many of those painful lessons - starting from scratch? With growing numbers of grandchildren involved, maintaining adequate affinity, motivation, interactions, coordination and Group Intelligence becomes a increasingly distributed task, with no simple policy fix possible. It can get ugly ever 3 generations or less, if there's no brewmaster tending the fermenting brew. If we are both brew and brewmaster, how do we tend ourselves to get a better brew, and not keep losing whole batches?

At heart, the sweeping Amsterdam beer policy, is an extension of what EVERY merchant lobby drifts into working towards. That is: merchants lobby to get policy tilted toward favoring THEIR product. And electorates look for ways to accommodate the endless sea of wheels squeaking to different extents.

Why do merchant sectors lobby? Why do electorates accommodate given patterns of merchants, to given extents, at different times?

Merchants lobby because bureaucratizing access to their product, as a policy ... inevitably opens options for shifting (& stabilizing) the spectrum of it's REAL price point (i.e., relative to other current & emerging static/dynamic assets).
Thereby, anyone in that and dependent industry sectors tend to ASSESS that policy development as "improvement" (for them).

That is the temptation that creates the phenomenon of Control Frauds, as the culmination of unchecked, Innocent Fraud.

Yet what does it mean for net Adaptive Rate of the "more perfect union" all citizens are supposedly pursuing? Electorates end up accommodating troublesome Control Frauds too long, precisely because of confusion. Re-tuning a complex system is far more difficult than the simple, local acts that can screw them up!

Is a group's NET development rate decreased, stalled, or increased by enshrining certain decisions in bureaucracy policy? By simple statistics, degradation is dramatically the norm, and required investment in CAREFUL regulation is always increasing, never stabilizing or decreasing. 

National self -regulation is rarely, if ever, a significant problem. Lack of self-regulation is the perennial, #1 problem keeping us from reaping the insane return-on-coordination.

How can we re-tune our changing system? Well, that always depends entirely upon context first of all, ultimately including how well the NET impact of the chosen context-response is ASSESSED by that electorate. Hoard, horde, lord knows we've all seen disastrous policies maintained for decades ... by squeaky wheel "elites," or even because of our own ignorance, in the person or the aggregate. Often we can't generate successful responses, or can't do so soon enough even once we realize what the solution is. There are many processes which sometimes seem at odds, not just the heart and the mind.

If you sample feedback from additional sectors, and plot them into a response spectrum ... how many lobbyist sectors or individuals approve or disapprove of a given policy change, how vehemently, and for what reasons?

Hmm, this example looms as one reflection of a bigger, more systemic need. How DO we the people actually assess where our policies are leading us?

Our reality is that we have to find solutions to that complex question.

There is no point of seeming stability that is not a dynamic equilibrium between conflicting forces. Get over it.

Further, there are no adaptive paths in the natural world that are not maintained as dynamic equilibria between an endless history of opposing factions! Get over that too!

There's always at least two, even bigger questions. Where are WE going from here? And HOW are we gonna get enough of us there, soon enough to matter?

The second question we've already answered. Rather haphazardly, obviously!

The answer to the first question is a neverending, and unpredictable. Simply put, there is always an even better way. If we don't find it. Some other nation will.

Meanwhile, we are ALWAYS putting far too much policy power in far too few hands.

Then we haphazardly select "leaders" to wield that delegated power.

Then we haphazardly select methods for developing, training and assessing criteria that define leaders. Any sociopath in a nice suit, with an expensive hairdoo?

They may be sociopaths, but they're OUR sociopaths?

All of them? When do their very numbers get in the way of OUR net progress?

Is zero tolerance for ALL frictions a viable option? No. We adequately documented, millennia ago, that recombination outstrips isolation or active reduction. Cultural recombination builds on sexual recombination. It's messy, but leaves all other methods in the dust.

Is accommodating ALL frictions a viable option? Also no. There's a huge gulf between too much selection (over-adaptation to one, fleeting context) and no selection at all. Those extremes have been documented as survival tolerance limits.

Natural selection is the survival path through that gulf. Finding the most adaptive balance between those two tolerance limits - over time & contexts - defines ongoing success. Obviously, it demands massively parallel, combinatorial sociology.

That sounds daunting, but truly amazingly, we can do this. Damn. We are GOOD! It's just that we can do even better, and must. Yet ONLY if we embrace the audacity of having the insane amounts of fun it involves, to commit to working on that together. Valhalla exists. It's just that we don't go there just to fight. Rather, we send our offspring as delegates, to emulate AND THEN EXTEND the fun we keep building. You got a better idea? If not, then ramp up the party!

So just how far down the path the Dutch have taken, can we all go, and in which combinations, nay ongoing permutations?

Now that we're all drunk on audacity, let's just jump right over some prior taboos.

Shall we just give all our sociopaths nice suits to pontificate in? Civilian as well as military? With hordes of trainee journalists to hang on their every word, and take photos?

Wow! To do that, we'd clearly need to reassign our best choreographers, to help stage, link and sequence presentable ways to work - just well enough - WITH a just-adequate sampling of our own squeaky wheels.

Why would we want to do that? In order to accommodate their addictions with cheap prevention instead of expensive repair of the NET mistakes they "lead" us into?

How far could we take this process? It will ALWAYS remain a group art .... until some new permutation of art becomes unpredictably enshrined as a documented principle of scalable science. We'd be going from analogous "givens" like selective chemo-taxis, to selective resource-taxis. The same behavioral principle, just expressed on a different scale, with uniquely scale-dependent methods.

Forget par-allel evolution. We're witnessing scale-allel evolution. Analogous principle, but expressed on a completely different scale. Personally, I doubt we'll progress as a nation, until every student learns such perspectives by age 10, so that they can move onward from their parent's obsolete contexts, not just over-study details irrelevant to our emerging resource-taxis demands.

How far can we go with more scalable versions of the Dutch approach? Right now, only as far as our un-coordinated, industry-sector lobbyists, and their paymasters? Remember that the commonly expressed goal of capitalism is blindly sequestering real resources from your growing community, by constantly promoting a higher real-price-level for your particular product. "Hey re-source. Hey re-source. Hey re-source." The mating call of the rank capitalist.

The part they miss is that there's a hidden refrain, detected only by those with an ear for their groups NET or aggregate refrain. Net or Group Capitalism, like other subsets of biology and thermodynamics, simultaneously reflects the ADAPTIVE SUM of all individual and aggregate drives to explore ever more options. The aggregate result, over time, is that our growing chorus line drifts into organizing on an even greater scale. By the statistics of accumulation alone.

It's true that at any time, the rich are getting richer and the poor are getting poorer. That happens right up to the occasional point where rich and poor once again trip over the fact that they can all get richer than any imagined ... by working together, insteading of stealing from one another. After a round of cooperation, they set about looting the perceived excesses from one another. The better way is to fully invest that excess in ALL of our offspring. That's how we got it in the first place!

Obviously, local competition is not all that's happened in history - although the typical, under-educated capitalist will deny it. By hook or crook (pun intended), even the most narrow-minded pirates eventually work together to pursue a greater return-on-coordination. Usually only after they trip over it once too many times.

So - jumping ahead - perhaps at the present time, our best challenge to tackle might be getting the entire spectrum of political lobbyists to put their heads together, in order to provide their best ASSESSMENT of how random policies will ripple out through all the inter-dependencies currently carefully tuned to code in our complex democracy.

Obviously, they'd rather not have to face that responsibility! To survive, however, we have to make enough of both them, and us, face that truth. If the question of responsibility isn't asked, it's far easier for them to rationalize, and to take the money and run, and for us to let them do so. Whether Active Frauds or Innocent Frauds, do we EVER need people that run from all duty to nation?

So how DO we get all industry sectors, and the lobbyists they mob Congress with, to actually use their heads, collectively, rather than ONLY in mock isolation?

The implications cascade all the way back to Kindergarten, to pre-natal care, and to EPA and all other policy functions. Human culture is a frog that can easily boil itself, before it knows which direction it's net options are heading.

Like General Patton, I am NOT going to prejudice anyone - or constrain their thinking - by trying to suggest HOW this will be done. I'm just suggesting this as a plausible, Desired Outcome. We need all of us to participate, uninhibited, if we're to act smarter than any subset of us.

What I will suggest is that we need more recruitment platforms. Many more of them. So that we can quickly recruit an adequate fraction of citizens to provide patient feedback, and engage in adaptive POLICY, not just tactical discussions. If we want to get away from "Ready, Fire, Aim," then we need to find ways to get people together, so that they can at least start hearing everyone's ideas on how to aim first.

Meanwhile, all populations grow, and spawn MORE sectors, with each spawning it's LOCAL assessment system. Our aggregate task gets MORE complicated daily, even while we sit still, slowly boiling and growing into a dissociated mob instead of a coordinated whole that is more, not less, than the sum of it's parts. Like it or not. We are distilling ourselves. What fraction are we selecting to distil? And why? If we get enough people to address those two questions, the "how" always follows their consensus, incidentally, as Patton noticed, and many before him.

Key Problem:
With increasing numbers, how do we constantly reconstruct a newer, AGGREGATE ASSESSMENT method, to chase the rate of spawning new factors which complicate our net assessment task?

Fast enough to matter?

In other words, how do we Scale Democracy, including it's Minimal Adaptive Tempo?

That's a tough problem to start with, and it's made harder by neglect. It's usually the LAST thing discussed, and then usually rejected on the grounds of obsolete tradition. The Aggregate can't do that because some components would have to adjust ... what they've "always?" done ... since the last time they made adjustments? Past experience suggests that we first approach these taboo subjects through patience and humor, since it involves goading people we like into actions they don't yet see the need for. Humor helps.

Even among the Dutch, is this particular step - in this case, mitigating mundane alcohol addiction - viewed as anything less than damage control within fractions of an otherwise frustrated, bored population who'd rather have access to bigger net options worth assessing? You'd have to be there to know for sure, and to assess the emerging options.

Our big issue, quite frankly, is "What is Homo Sapiens going to slowly DO with itself?"

Are we going to FIND & succeed at new challenges worthy of applying our exponentially increasing talents to?

And, even given consensus Desired Outcomes, how vigorously are we going to try to SELECT success, by optimally trimming the differences between LOCAL ASSESSMENTS and NET ASSESSMENTS? How will we know if we as a people are making progress, or not?

If past biology is any indication, those questions will be explored in regional enclaves (call 'em nations or not).

The first enclave that figures out a faster/leaner/better way to explore more options per-unit-time than the rest of us are doing ... will cull the rest of what was Homo Sapiens. Just like we culled Neanderthal, Denisovans, chimps, gorillas .. and all other competing primates.