Summary Fusion of OBT&E, OBCE, Credit, Currency, Criminology & Policy

OBCE distilled to 4 points:

1) Aggregate progress means local habits have to give way to emerging, aggregate habits.
2) The habit of coordinating Cultural Recombination is mightier than competition.
3) Public Discourse defines Desired Outcomes and drives coordination.
4) Practice drives agile Public Discourse.
[Any comments? Feedback is absolutely required, as you'll see, below. :) ]

Let's start with a challenging axiom.

There is no distinction between leading, policy, economics, and operations ... there is only staging, linking & sequencing of distributed actions, to explore emerging options.

Next, let's jump right in by noting that aggregate success, and Output Gaps are gated primarily by outmoded, persistent local habits of dominance & subjugation, ... with no aggregate goal in mind.

The real kicker here is that the vast majority of self-defrauding behaviors, from Innocent Frauds to Control Frauds, are expressed as insufficiently examined habits, among people who are not are not getting enough practice at thinking anywhere hard enough to sense the aggregate outcome of their personal compulsions.

In short, frictions and output gaps are manifestations of lagging coordination.

And the frauds that supposedly sap coordination? Frauds are just random agents following random actions - SANS ADEQUATE PATTERNS OF AGGREGATE FEEDBACK!!!

There is a better way. We can call it Evolution, and it's core methods are coordinating on a greater scale.

How does coordination grow? Via inevitable autocatalysis. If it can, it eventually will, simply due to statistics. So if it can happen, why not sooner rather than later ... which may be too late?

How does a human aggregate catalyze it's own coordination? First, by adequate preparation. Group Intelligence is always held in the BODY OF PUBLIC DISCOURSE. We have to generate an adequate sampling of aggregate discourse, before we can tune and leverage it to fit a given context (aggregate regulation). So the key, underlying process always requires practiced familiarity at changing methods for continuously generating & re-shaping adequate patterns of distributed feedback. That requires agile Public Discourse in it's broadest sense.

That's what Walter Shewhart, 80 years ago, called the "Cost of Coordination." Any biologist, ecologist, physicist, chemist or statistician would agree with Shewhart's statement.

"In all .. systems, the highest cost, by far, is the cost of coordination." W. Shewhart

Shewhart, and later students of his PDSA cycle, such as Deming & Boyd, considered the immediate corollary so obvious that they never bothered to state it in print. However it's useful to state it for beginners, simply to prime their learning curve. "The highest return, therefore, is always the return-on-coordination."

Jumping ahead, one can readily see from this that It really does ALWAYS come down to saving aggregates (not just frauds) from themselves. And saving our nation along the way. How? By indirectly tricking any and every size aggregate into actually exploring coordination on a larger scale. Humans are inherently exquisitely cooperative, but coordinating their constantly emerging diversity creates a continuously growing need for NEW coordination triggers, moderators and practice methods.

Call it Cultural Recombination, or something else, depending upon who's listening, and why. :)

Cultural Recombination is an extension of the same process that occurs during Sexual Recombination and embryology. We need social catalysts that drive and shape Cultural Recombination as much as we need the proteins and nucleic acids that catalyze sexual recombination.

Just adequately reconnect everything to everything to master context, and then - for resiliency - relax to what's minimally needed for a given context. Aggregate resiliency means actually keeping enough in adequately distributed reserve, to enable re-mobilization for changing contexts.

Cultures just do that continuously, in interleaved, asynchronous patterns. That always makes me think of Combinatorial Chemistry. In "Combinatorial Culturary," we're throwing more stuff together all the time, whether we will or won't. Our task is to select an aggregate adaptive signal from the changing aggregate noise. Luckily, that's all we have to do, and we're very good at it, when we bother to try.

Have analog computing system, must use it.

The only analog computing system more massively parallel than the human CNS is the human culture. Both are terrible things to waste.

ps: There's also one, undeniably inevitable "economic" corollary to all this. Growing aggregates must devote higher proportions of their time to aggregate coordination. The ratio of "dedicated work" to "dedicated coordination" is a function of aggregate size. Simply put, that means that the AVERAGE hourly work week should be continuously declining variable, co-yoked to population size and aggregate agility. If we're to maintain a functioning democracy, then our hours of work per week absolutely cannot be a fixed constant. To reap the insane return on coordination, we have to dedicate increasing proportions of our time to distributing, analyzing and testing the implications of our own, distributed feedback - instead of just working harder at what we're already doing wrong. It's that simple. Less work, more discussion & coordination.

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 are Monetary Operations For?

How do we use distributed monetary operations to advance Public Purpose, sooner rather than later?

Briefly, organizations do what they must to survive. That includes inventing social species. The human social species survives by organizing scalable success faster than other species. Our moment of adaptation now floats among human cultures, as an unfolding success path tracking the combined pace & quality of distributed decision-making .

To optimize national returns, we generate as many distributed options as possible, then select from them as wisely & pace allows.  Success is continually minimizing constraints on decision quality. For currency, we do that in large part by separating two concepts - quantity and price of bookkeeping currency.  Across diverse decisions co-optimizing both local and group outcomes, it is price, and not access to bookkeeping, that should be the only burden on local degrees of freedom. Focusing on bookkeeping price vs quantity guarantees all people infinite pathways for contributing to group benefit. Limiting access to fiat currency simply limits the volume of numerals that students may utilize as they progress through math studies.   Once virtual bookkeeping is free, there is no public utility in limiting it's utilization.

In order to scale agility of large groups, currency supply should grow, on-demand, while available options should compete per ROI. That refinement is precisely what allows us to parse scaling options.  Evolving groups need the confidence to explore increasing options, yet still want to choose wisely.  Constraining the quantity of distributed bookkeeping is a useless distraction, whereas floating local pricing - NOT price stability - retains and focuses utility.  Stringing together organized chains of distributed decisions is EXACTLY how agile groups outpace more constrained groups.

Populations removed currency quantity as a constraining variable by transitioning to "fiat" currency standards, where currency supply follows than rather constrains the number of distributed transaction decisions that can be made.  Fiat currency, in it's most general definition, is not convertible upon demand to any particular commodity, only indirectly to public initiative.  Further, it's volume is allowed to float, as a function of public initiative.  Finally, it's exchanage rate with other currencies is also allowed to float (floating Fx). Together, these measures help remove currency supply as a constraint when optimizing the quality of distributed decision-making. Fiat currency is simply a virtual measure of unbounded public initiative. The currency-access side of distributed decision-making is never the place to impose market discipline, since it has become obsolete as a limiting variable.

Fiat currency, as only one of many tools we use, is created and distributed via public initiative (Appropriated by Congress, agent for the electorate), destroyed through taxation or return of fiat "profits" to our Treasury, the currency issuer (through it's agents, the IRS & Central Bank) yet primarily utilization in distributed transactions.  Other tools that we use are regulatory services that serve primarily to manage tolerance limits for all aspects of self-organization, from preparatory education standards to control of fraud rates.

Monetary operations involve fiscal, monetary, taxation and criminology fields - all serving public policy.   As only one of multiple tools, monetary operations are useful only when coordinated to optimize quality of distributed decision-making.

Developmental statistics, freak accidents & psycho-social variance will always prevent us from 100% utilization of our population at any time.  However, access to minimal local currency supplies as "revenue" is an obsolete concept once the transition to a virtul or fiat currency standard occurs.  There is no downside for the issuing group since currency supply follows net group initiative, and is not convertible upon demand to anything else. The upside includes more options to pursue full utilization of human capital as asynchronous group options occur.

The only reason for a group denying a member access to minimal "maintenance" amounts of fiat currency is lazy admission that "we can't come up with anything worthwhile for you to do."  None know the potential value of others, given 308 million people.  Rather, to explore unpredictable options, we either suggest things to be done, or follow individual's suggestions for novel things worth doing.   Since fiat currency supply is infinite, we need only practice selecting ROI from - not constraining - emerging, distributed initiative.

There are no better places to orient to modern monetary operations than the books by Mosler, "The 7 Deadly Innocent Frauds of Economic Policy" and Mitchell, "Full Employment Abandoned".