Have YOU Ever Heard Of A Human Aggregate That Ran Out Of Fiat?

It's sad & amazing that the function of national group-brains is declining (and our aggregate species group-brain too) ... even as neuroscientists worldwide obsessively over-study the structure of individual primate brains, all the while oblivious to the structure of the group-brain emerging all around them. 

That brings new comedy to the term OCD. 

On what scale? You can easily argue that the phenotypic persistence displayed in Deep State institutions mediate SSOCD, or social-species obsessive-compulsive disorders.

Consider the following trains of thought.

Balance sheet recessions and democracy 

and 

A depressing report from Florence

From the Renaissance to depression, in 500 years. Two impressions forward, one depression back? Is that the best we can do?

Somewhere in our current culture, we've forgotten that the whole purpose of social species is to take on Desired Consensus Outcomes which are beyond the ambition of individual skill sets.

Too few follow such discussions.

Hence, those that do are largely ignored, as aberrations.

Too much of our public discourse has been on various collision courses, & have actually already collided, years ago, producing our ongoing, slow-motion train wreck.

The US is supposedly acting slightly more intelligently than Japan or the Euro-zone ... yet not much, as the confusion in the following article shows.

"Weak banks don’t lend, highly indebted consumers don’t spend, and businesses with poor prospects don’t invest."

Yet this same WSJ author comes out with the oxymoronic statement:

"But U.S. policy makers failed to forge agreements to rein in long-run deficits, ..."

Why? Because ...

[a deficit in fiat] "could be a problem should another crisis hit."

WTF? And edges COULD be a problem too, IF the earth were flat.

I swear. Too many people in diverse disciplines forget the simple method of algebraic substitution, as a sanity check. 

To spell it out for non-thinkers, we all say we've used fiat currency for 80+ years. Yet what does "fiat" mean? At will? Who's will? The public's? So fiat currency denominates net Public Initiative? The word "fiat" means initiative, and/or nerve? Similar to public confidence?

Have YOU ever heard of a human aggregate that ran out of fiat?

And if there's a deficit, what is it that we're trying to balance? The balance of Public Initiative vs personal hoarding? Inflation vs deflation? Stockpiling Future Options vs Trying to Hoard Current Fiat? People get lost in making lists of things to balance, often losing track of form vs function. At the end of the day, we do have a constant, orienting reference: balance what continues to be adaptive vs what becomes maladaptive.

Yet some other slow boarder, trying to catch the thinking train, opines that"monetary policy is limited when an economy slows down considerably and lacks confidence."

LOL! Let me try to translate & extend that to it's logical implications. Groups run out of confidence, & generate a deficit in nerve, which they must then borrow? Can't spend nerve they don't have? Sub-groups often run out of confidence. When they do, they borrow - or rather receive - more nerve from the larger aggregate. That's what defines a social species.

All this lack of sense makes you wonder how humans made it through the last 200K years, always running a perpetual "deficit" in nerve. Does no one get the joke?

Who have we been "borrowing" nerve from all these millennia? Accountants presuming an external source for every sink? Was double-entry bookkeeping a miracle or a curse? Or always both simultaneously?

That all this social noise occurs in the year 2014 is a sad testament to the fragility of homo sapien logic. Homo sapiens still can't see the culture (or social species) for the individual?

And, there's the parallel myth that "job creators" create jobs by hiring people - even though that is just one receiving step in a cycle. One businessperson hires only when they have requests from other buyers to sell more, so they hire to meet that demand. Businesspeople rarely hire just to stockpile inventory, i.e., with no sales in sight. Optimal asset stockpiling occurs as aggregate stockpiling Policy Options, as a growing Policy Space, which they explore by increasing the distributed options available to their grandchildren.

Somewhere upstream in the circle of consuming/buying ... if buyers/consumers [i.e., job creators] have no income, limited options, and constrained innovation, how are they supposed to create jobs (i.e., demand for products and services)?

Acquisition pulls economies. Only drug dealers push.

Ok, greedy lobbyists do too.

Can we just redefine NeoLiberal's as those who don't believe in social species? Rather like those that don't believe in a round Earth or a helio-centric solar system?

Until then, we may as well stamp the following on the business card of Homo Sapiens:

Have Options,

WON'T Explore Them.

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.

Statistically Significant Practice Of Democracy: The Adaptive Culture Cup Challenge For Context Nomads, and Teaching Citizens To Think.

This essay was prompted by yet another advertisement that both cracked me up, and also unleashed the stream of reform. Here's raising a cup to those who pave the way.

Consider the following ad.

"Live well, Live Green [buy a printed book]"
For 200K years, the answer has been "talk to people," right?

For 3.5 Billion years, the answer has been "interact," right?

So what is this ad really referring to, in what context? For what reason?

Living? That's a life-process, for individuals and groups.

Green? That's a sustainability-through-extended-maintenance efficiency concept - about extended life.

Printed book? That's a static repository of fixed observations, usually raw data plus notes about a few data-interdependencies.

Yet what are the real boundaries and substance of the data "store & hold" matrix that these concepts reveal? When presented with such ads, all kids face the same dilemma, and eventually ask the same questions, in fumbling ways, depending on age and background.

Basically, as soon as all concepts being discussed are wrapped in a single matrix - i.e., a recognized situation or context, then kids can't help sensing - and maybe voicing - questions about the matrix itself.

Where did we come from, and why?

Where ARE we, anyway?

And where are we going next?

And why. Why? Why? Why? Why? [SETA: search for extraterrestrial answers to kids questions. The genesis of all religions?]

Even some adults retain this natural inclination, if it hasn't been "successfully" trained out of them, in their typical dinosaur race to become uselessly over-adapted to one, transient context.

When considering the questions that kids ask (when protected and left to their own, imagination, especially if it's actually nurtured, and not beaten, "educated" or otherwise "trained" into arbitrary prejudices and biases) - several answer patterns frequently appear.

A large % of the stuff implicitly described/learned/used ... is never explicitly written down! (usually more than 70%?)

Another large % of the stuff written down ... is written down by people who never use it anyway. [Go figure!]

Most of the stuff that actually, unpredictably gets done ... is done by people who do a little of everything, while "everything" keeps changing?

But where does that leave us? In a system that no member can fully understand?

There obviously is a "way," since we're here, after 3.5 Billion years ... but it can NOT be written down as a static message that most people can use, regardless of how many rules-based systems we cycle through when trying to describe change.

Sisyphus pushing Budda up a Tao finally learned that no static rules are Sufi_cient? :)

How do we finally discern the "sufi" in what's "transiently necessary" as opposed to what's "enduringly sufficient?" By neural tuning of repeated, sensory-triggered patterns? Upon reflection, every reactive or agile system ideally requires every supposedly static component to in actuality be an agile, reactive unit displaying degeneracy.

Like system components, system interdependencies (aka, "rules") in an agile system must also display degeneracy if that system is to "stay in the race" for very long. In short, the necessarily tuned rule is not an absolute rule, only a dependent probability function. Again, go figure!

Systems, pre-human and human, have obviously evolved, and aren't stopping yet. So we ALWAYS have a challenge: to quickly & simple describe the source, the current state and the next-steps of our developing population.

Selecting which of many aggregate, composite steps is THE next systemically adaptive aggregate step, from any given state, is the fun part of existing.

How do we prepare and encourage kids to solve that challenge, and enjoy every part of it?

There are no easy answers, but here are a few observations and thoughts.

Observation. A growing system's net operation can only be described in terms of past/present/emerging dimensions that 99.9% of people never get anywhere near enough practice describing, thinking about or manipulating - in every day activities. Unless, that is, they stay proportionally involved in personal, regional and national policy - and thereby maintain statistically significant practice of democracy.

Observation. A growing human system can only evolve through maintenance of full-group practice/observation/discourse as a navigation process?

Yet what moving target are we chasing, and what changing obstacle course dimensions are we navigating through?

If target-location and obstacle-course-dimensions are both constantly changing ... then there's nothing we can write down fast enough to solve everything.

Therefore our navigation process has to be constantly weighted towards discovery of emerging dimensions of obstacles to navigate or steer past.

Individual organisms initially evolve through natural selection from prior, diverse sets of individuals. Social species also evolve, through natural selection from diverse models, known as cultures, presently organized into nation states.

Ongoing development of each human cultural evolution model is aided by constantly referring to and updating an evolving navigation guide, i.e., from a given culture's net body of cultural knowledge, practices and discourse. To remain relevant, that navigation guide requires continuously interleaved stages of discovery/editing/re-writing - reinitiated in roughly that order. Obviously, the proportion of net group and individual time applied to each interleaved stage must float, as fleeting situations dictate?

Surely that reference model can be absorbed by all ten year old humans. In fact, we can do even better, and it's long past time to do so.

Walter Shewhart famously said (80 years ago!) that "Data is meaningless without context."

Really, Walt didn't go far enough! Our conceptual hole is actually deeper than that.

"Data - and paradigms too - have no enduring relevance, without context path!"

In the end, even redneck stock car racers realize that no one gets brownie points for being #1 in every process that may or may not even be needed in each pit stop. There's a bigger goal - one that requires staging, linking and sequencing of multiple contexts for some longer term purpose.

Our cultural race never ends, and every context is simply a pit stop.

So why do so many preening capitalists strut around bragging about their quarterly results? They're stupid for taking their eyes off our moving, cultural prize. And we're just as stupid, for pausing to watch current capitalists in their mindless action.

Their entire paradigm is only randomly connected to our long term requirements! That's an inescapable corollary to the observation of evolution itself. The unassailable reality is that we are charged with navigating through a "context path" where the details of each and every successive context, as well as their rate of arrival, are entirely unpredictable. We want dynamic cultural options, not just instantaneous, static results! The two vary independently, but one always serves the other.

Results are simply the dimensionless "currency" which we denominate our increasing options with. Today's results are yesterdays loose change, most are soon discarded, and all are soon just incidental to new options.

Results are meaningless without option paths. 

Where can we go from these results?

For every year and every generation of humans, data, paradigms and results will always be meaningless without not only context awareness - or Situational Awareness, if you prefer - but context path.

In short, we remain Context Nomads, migrating between transient contexts. All that's changed is that context change is - for now - no longer dominated by geography, at least not here on planet Earth. Yet the progressions of unpredictable contexts certainly didn't stop. Rather, our awareness of the dimensions of the personal and aggregate context changes we're experiencing have simply lagged.

So what is actually relevant and enduring about all this? Is there anything here that we can use to update and refine our Cultural Navigation Manuals for all 10 year olds?

How about this notion. There is a 3-step challenge that every ten-year old can easily grasp, with only minimal practice, without even bother to call it Set Theory.

Kids in ancient nomad cultures absorbed this lesson effortlessly, before learning to walk. 

You can still quickly demonstrate this to kids in a wide variety of past/present/future, simple card games, to drive the point home.

Challenge Level 1: Gather data and recognize patterns of data that reveal interdependencies in a given context (end of your nose, here & now). Local Survival Navigation in Dimension Level N.

Challenge Level 2: Gather data-pattern harmonics and recognize patterns that reveal process interdependencies (end of your nose, over extended context). Local Survival Navigation In Families of Dimensions.

Challenge Level 3: Gather data-sub-pattern harmonics and recognize sub-patterns that reveal multi-process interdependencies beyond end of your nose, over multiple, successive contexts). Agile, Navigation-Upon-Demand, Through a multi-Context Obstacle Course.

How does complexity of that obstacle course vary? It gets more complex, simply as an exponential function of our own numbers and characteristics AND our own rate of change! Not to mention any outside sources of change. We have to constantly practice, just to stay in the Cultural Game. That's why play behavior is literally EVERYTHING!!! That discussion, however, is for another time.

In the meantime, if those simple challenges can be consolidated into a Culture Cup Challenge that student's can aspire to continuously vie for, surely it would provide a better outlet for growing individual and group intellects than does our present spectrum of competitions for static assets, sex, drugs and rock&roll?

Screw the Sprint Cup, Davis Cup and even the America's Cup! We have bigger cups for our group intellects to pursue! The Adaptive Culture Cup.

How do we Maintain the Quality of Distributed Monetary Operations & Decision-making?

First, always remember that currency is a tool created by an issuing group, and that all fiscal/monetary/tax issues involve how best to use that tool. No matter how good a tool you have, you have more options for both using and misusing it.

Separating tool & tool use is a good way to look at what goes wrong everywhere. For now, I'm going to attribute all usage problems as Cargo-Cult Process Management.  How we misuse monetary operations is similar to how we mismanage anything.

Instead of being careful, we're being stupidly lazy and making our nation one big skunk-works. We are, by definition, always in an ongoing aggregation process, yet it seems our thinking is typically stuck somewhere between:
1) personal gain,
2) system gain, or
3) co-optimizing both components + system.

Our greatest need? Refined methods for keeping higher proportions of our electorate practiced at stage 3 thinking.

What can we best use monetary operations for?  Obviously, to advance Public Purpose, which boils down to a 2-stage optimization task of maintaining components (people) as well as system (nation).  That goal is easily stated, but difficult to practice.   How do we actually tune monetary operations to help rather than hinder Public Purpose?  To answer that, we need to step back and look more broadly at context.

When naive people recognize a process for the first time, there's a temptation to think that it's use is adequately defined by a few variables ... when, in fact, there's a polynomial list of variables involved and no easy way to see which permutations scale across multiple contexts. Otherwise, it wouldn't have required 3.5 billion years on Earth to produce the densely-engineered, incredibly complex system call "us".

Take something as mundane as orange juice.
Some mechanical engineers & organic chemists say, "How come the growers/grocers have all the orange juice? It's mostly sugars, ascorbic acid, and some volatile oils. That's not stable. Let's fractionate it for separate storage, then recombine on-demand." Voila! Cargo-cult context management!

Once deoxidized & fractionated, purified parts of what remains stable is hoarded in bulk storage.

Eventually though, such, overly simplistic, Cargo-Cult thinking causes apoplexy among nutritionists, biochemists, physiologists, diverse clinicians, statisticians and general system scientists ... not to mention gourmets & chefs, and ultimately parents, educators & diverse developmental specialists.  Defeat was chosen from the beginning, because all the tool users weren't adequately linked to why they were using their tools.

We're always novices at emerging context. We presume that one-pass sampling of a complex system provides enough predictive power to cavalierly tinker with the whole system. To improve, we always have to explore more group options faster, so tinkering is needed, but must initially be safely isolated until beginners learn from most of the mistakes that others would see coming, if asked.  After that, all tinkering always needs full-group review.  There is no known mathematical alternative that can define the quality of distributed decision-making.  Decision quality, like data, is meaningless without full-group defined context.

Our greatest need - even in monetary operations - is to extend the sanity-check process to better sample all emerging sub-processes.  Here's how.
1) Have a rough model or checklist of all stakeholders repercussions (contingency tables).

2) Have a rough model for what constitutes adequate sampling of stakeholders (actually use the contingency tables).

3) Have a rough model for the ratio of disruptive/adaptive momentum (the summary from reading extended contingency tables).

Basically, don't imbalance groups faster than you can re-organize them. Otherwise, we're sawing off the limb we're sitting on.

[Note: It's not really as bad as it seems. Sub-processes more than ~5 layers deep in any system converge to stability. New options are statistically shielded from black boxes more than ~5 fractals in the past?]

Currency & Monetary Operations, And How To Use Them.

This blog kicks off with three questions, addressed in successive posts.

1) What are monetary operations, and

2) what are they for? [We forget, and even forget to ask.]

3) How do we seek a general method for answering those unending questions, and keeping emerging monetary Q&A meaningful to all.

As you'll see, these questions can't be separated, only revisited in a useful, variable sequence.

Initial answers, up front are, respectively:
bookkeeping;
for accelerating cultural growth; and
by simultaneously optimizing [people+nation], not either separately.

Some needn't read any further.

For the less astute here is post #1, what is money and what are monetary operations?

Money, or "currency," is what people use to denominate distributed transactions. It's that simple. If you have no need for widely separated transactions, then you have no need for currency. Adam & Eve didn't mention currency, just fig leaves. Who knows what they were really hiding.

In small groups, organization can track affinity bonds, and currency can be considered to be "backed" by Central Stores of arbitrary commodities. Yet as separation between transactions scales - with population size and/or market complexity - currency becomes a more distributed form of bookkeeping. A currency transition occurs, from primarily a store of local value, to primarily a unit of account for coordinating widely separated events in increasingly complex transaction chains. Transitions occur because net value to an organized group trumps any local definition of value. Strategic, organizational agility can't co-scale with population without a transition to fiat currency methods.

Someone smarter can always take your Central Stores, whether your men, your women, your horses, your gold, or any other commodity.  Therefore, currency is always backed by group initiative. Affinity bookkeeping can't scale with population, so organizational state requires more distributed logistics accounting. In larger populations, currency must be backed more & more directly by distributed public initiative.

"Why is state money better than gold?” Because the highest return is always the return-on-coordination. Scaling up ability to explore large-group options requires scalable large-group agility and scalable large-group intelligence & coherent alignment to emerging options. That's the same reason that species & armies are never resource constrained. The biggest constraint is always organizational ability. That means that only state-money denominations are agile enough to keep up with the kinetic demands of uncontrollable public initiative. Commodity-money was thoroughly tested, and was found inadequate. Its valuation has to be constantly re-scaled, simply because populations & their options scale faster than the magnitude of any commodity store. If that’s the case, just simplify and cut the commodity out of the re-scaling loop that links organizational ability to group outcomes.

Currency concepts differ for local-, mid- and broad-minded people. Minds-in-training start with personal transactions, while experienced minds also consider nationwide coordination. Somehow, that spectrum sums to a coordinated whole greater than the sum of it's parts.  It's no wonder that Ben Franklin, an early proponent of the return-on-coordination, was also an early student of fiat currency. For now, let's just agree that money or currency tends to mean different things to different people in different stages of their development.

To review the history of money, there are no better places to start than Wray's book Understanding Modern Money [a historical guide]. and Graebers book Debt: The First 5000 Years.