Meeting Challenges With Logical Institution of Adaptive Change ... or ... Continually Accelerating End Runs Around Institutional Momentum

"All problems in computer science can be solved by another level of indirection*, except of course for the problem of too many indirections." David Wheeler

More usefully ...

ALL PROBLEMS IN DEMOCRACY CAN BE SOLVED BY ORGANIZING ENOUGH TO LEVERAGE RATHER THAN MERELY SUFFER MORE LEVELS OF INDIRECTION.

These and other statements about indirection are actually concise summaries of the theory of adaptive evolution. Sure we have plenty of old & new challenges, every year, if not every day.  How do we meet and survive them?

Name your problem.

Fiat currency budgets? White Collar Crime and banking? Tax rates? College loans? Unemployment? Military Industrial Congressional Complex? Police Brutality? Blue Collar Crime? Trade Policy? Excessive Regulations? Slow Moving Bureaucracy? Pollution?

All of these can be easily solved, by teamwork and organized teams. Most will acknowledge that organized teams can do amazing things, and have been doing so for ~4.5 Billion years on planet Earth.

What's to stop us now?

If that's the case, how do we actually take arms against a sea of self-generated problems, and by organized opposition, overcome them? Here is an observable framework, which we've already been doing, for millions of years.

Key concepts:

Successive, Transient Contexts.
Toolkits.
Recombination.
"Social" organization

Over-adaptation as Institutional Momentum.

Coordination & coordination rate.
Cost of Coordination.
Return on Coordination.
Communication & communication rate.

Selecting signal from noise or "parsing."

Reducing frictions.
Autocatalysis.
Outcomes vs methods vs perceptions.
Tuning & tuning rate, for components & the whole.
Adaptive Quality (including tempo) of Distributed Decision-Making = Adaptive Rate
Aggregate Interactions & Interaction Rates.
Aggregate Context Awareness.
Perceiving the Sum of [Aggregate Actions + Diverse Component Actions]
Survival = Optimizing the Sum of [Aggregate Actions + Diverse Component Actions].
Sustainability.


1) Successive, Transient Contexts.  People learn, as they grow, that the life of a person, a family, a tribe, a corporation or a nation state involves not just one, but multiple challenges occurring as a succession of transient contexts.

2) Toolkits.  In the long history of planet Earth, we continue to unravel astoundingly diverse examples of how physical aggregates, biological species and whole ecosystems survive succeeding contexts through slow accumulation of increasingly diverse toolkits. The more complex a system is, the more ways it can adjust to changing context (not that it always does). There is a fundamental difference between how most people define efficiency and resilience. Efficiency commonly refers to performance in a given context, while resiliency refers to outcomes across multiple contexts.

3) Recombination. Recombination is the outcome of pursuing another level of indirection. When the sticks used by ancient hominids weren't long enough to make a lean too adequate for their growing band, they started recombining them together in novel forms, to make better, faster, cheaper nests or homes. Once you look, recombination is everywhere, including physiological, chemical, biological, sexual recombination of genes, tools & toolkits (even snowmobiles!), behavioral (dance? music? art? sports?) and on to the cultural recombination we call changing business systems and legal systems. We're now facing demand for supra-cultural recombination among multiple nation states. Don't expect the United Nations to go away. It's what comes next that you should be pondering.

4) Social Organization. It's fundamentally useful to remind all citizens that social species rule because of their ability to scavenge all their diversity, and keep it in their toolkit for recombination and re-purposing ... as succeeding contexts demand. Social species outdo all others, and dominate the Earth, because those characteristics, which confer overwhelming increases in resiliency.


Implications.


5) Over-adaptation as Institutional Momentum. History certainly implies that it is usually death to over-adapt to a transient context. Today's "winner" is always today's Dinosaur and tomorrow's history ... UNLESS ... that entity can unwind and recombine the very institutional momentum that allowed it to be the MOST efficient today. Going too far has implications for your survival statistics, once the direction of the adaptive race changes.

6) Coordination & coordination rate.  If over-adaptation to any one of a series of fleeting contexts is dangerous, what's the fall-back strategy? It's quite obvious, actually. Just like the runners in a multi-lap footrace may or may not be rewarded by "winning" a particular lap, they all share the goal of staying in the race and positioning to lead WHEN NECESSARY. They typically do that by hanging around the leaders, and "staying within striking distance." And what if the race never ends? What if our adaptive race through history keeps changing direction, by changing context? In that case, our survival strategy is to survive and stay in the race. Hence, the ultimate tool in our already complex cultural toolkit is skill at coordination and cooperation.

  Is it better to be biggest? Strongest? Fastest? Not for our purpose. Rather, it's safer and "better" to assume and discard any and all attributes and skills, when & as needed. Grow fur? Humans don & shed clothing instead. Muscle mass? Humans use levers & machines instead. Fangs? Humans use knives instead. Physical speed? Humans use tools, domestic animals, bicycles, cars, boats & planes instead. In short, humans survive via recombination, adaptation and evolution. We're constantly shedding whatever holds us back, and domesticating ourselves to be resilient over time, rather than over-adapted to any particular, transient context.

7) Cost of Coordination.  Yes, there is a cost to coordinating. Just look at the practice & training time any organized team has to put in ... to learn and express aggregate coordination.

  Walter Shewhart famously remarked an obvious truth, that "In all complex systems the biggest [ongoing] cost, by far, is the cost of coordination." Coordination requires an effort, in order to broadcast, receive, sample, analyze and respond to constantly increasing amounts of information from a growing number of teammates doing increasingly diverse things. Can you imagine the challenge for basketball players and coaches if basketball teams went from 5 players to 6 on successive days, then 7, 8, 9, and 10? And what if the rules, court and equipment also all changed? That's life! It's also why sports can be initially useful, but quickly becomes an exercise in form over adaptive function. Ditto for music, choreography and theatre. They don't change as fast as our world does, and hence have become useful to fewer and fewer of our expanding populous.

8) Return on Coordination.  The most immediate corollary is so obvious that Shewhart left it unstated. In all complex systems, the highest return, by far, is the return-on-coordination. In fact, the return on coordination is the only return that exceeds the cost of coordination. If evolution occurs among others who are coordinating, then we have only one choice, to die out, or keep coordinating on a bigger/faster scale, so that our team outcompetes and absorbs, all other teams. What then? What if there is one day a United States of Earth? Long before that, our own complacency and un-directed personal habits and Institutional Momentum will become our greatest competitor. How do we compete with ourselves, and thereby maintain our adaptive rate? Obviously, just by staying alive. Our current challenge is to change everything and adapt fast enough to survive ourselves. A hundred years after Wallace & Darwin, even some literature majors eventually recognized that. "Everything needs to change, so everything can [appear to] stay the same."


More Implications.


9) Communication & communication rate.  How do social, coordinating species invest in coordination, so that the return always exceeds the cost? Despite what a sitting US President foolishly claimed, evolving species do "Nuance."
Those social species (and nations, and democracies) that survive:
  Exchange more information, faster and more widely.
  Practice more, and perceive more.
  Parse more context from the expanding sea of data they generate.
  Recognize and explore more aggregate options ... faster.


10) Selecting signal from noise or "parsing."  What does an adaptive signal look like, for an aggregate constantly re-orienting to a context that is changing yet again? Basically, one that allows a 2-stage optimization task.
S = Sum[A+B], and not Sum[A] + Sum[B].

  That's how a whole becomes greater than the sum of its parts. It's also how the USA wrote a Constitution and set out to "form a more perfect union."

  Both "A" and "B" have many parts, but they're used here to mean "keep the components alive AND adequately provisioned" (A) plus "grow the system" (B). Neither citizen component nor nation can sacrifice too much, nor gain excessively, if the whole is to exceed the sum of its parts. Yet between those tolerance limits we have tremendous freedom to operate and express distributed plus collective ingenuity.

11) Reducing frictions. This is both trivial and sublime. Any mechanic or race car tuner knows that reducing friction between moving parts is key to enhancing performance of a system. That's why we have oil, grease, ball bearings and precision carving or machining. Yet how many realize that the same thing applies to all the human moving parts in a social system? Much of successful military science and Officer Training comes down to systematically finding ways to reduce frictions among teammates, and making it hard for people to work at cross purposes. That's how social species allow themselves to leverage their increasingly diverse talents.

12) Autocatalysis.  How do social species actually do all these things? How do they simultaneously increase diversity, increase options and decrease frictions, so that they can explore their emerging options, and do so faster than others? The whole package is called autocatalysis, when each component catalyzes all other components to make a whole greater than the sum of its parts. That's the same way the combination of an egg cell and sperm cell catalyze the rapid growth resulting in a new, unique human, in a self-driving cascade of reinforcing triggers.
  First, everything has to be connected to everything, so everyone can see - or be frequently reminded - of dangling tasks. Then all data streams have to interact or discuss, so that analysis preserves the 2-stage optimization mentioned above. Finally, a bias to ADAPTIVE action must be present, which both triggers activity AND tempers it per the preserved connectivity. "Do no harm" gets to be a longer and longer list, as your number of co-citizens grows.

  The result is a massively-parallel calculation that is always impossible for participants to predict, in part because so many of the terms keep changing before the calculation can be completed. As an aggregate, we have zero predictive power, yet unlimited adaptive power, so far. It's up to us to figure out how to adapt, through continuous indirection.


Keys to adaptive autocatalysis.


13) Outcomes vs methods vs perceptions.  How do we keep our eyes on the prize, when the context never stops changing and the "prize" is continuously redefined? Answer, by trial and error discovery of unpredictably subtle adjustments. We redefine the "prize" as ability to survive and thrive, and we keep our eyes on that drifting outcome, whatever it takes. That means maintaining a determination to break any abandon or modify any tradition or break any taboo, as necessary, aka, practice Cultural Recombination.

14) Tuning & tuning rate, for components & the whole.  Our proverbial mechanics and racing enthusiasts understand the concept of tuning. If they're involved in automotive decathlons or fleet management, they also understand the concept of tuning for resiliency rather than breaking down before completing a multiple-race circuit. However, it's a comical commentary on narrow thinking that there are so many teams of expert "tuners" who stubbornly fight for years on end, and insist on tuning everything except their own interactions. Biology is chock full of examples of molecular, cellular, endocrine, muscular and behavioral functions that are systematically tuned to create a marvelously flexible whole, with the tuning based upon long lists of subtle, "if-then" variations on a basic theme. Just think of how many ways you can tap your finger, or move your tongue, just to start with trivial examples, before moving on to more complex examples such as speech, multiple languages and teamwork. Our survival depends on how fast we can readjust countless processes, and re-adapt them in novel ways, for novel purposes when and as needed. That means adding nuance, not avoiding it.

15) Adaptive Quality (including tempo) of Distributed Decision-Making = Adaptive Rate.   The reality of social tuning is that aggregate success follows the quality (including tempo) of distributed decision making. The tempo of trial & error learning is what biologists call Adaptive Rate. Those aggregates that can make adjustments faster, will outlast those that can't. Further, not that those who perceive possible outcomes earlier, and identify emerging options, can start making changes and reducing frictions sooner.

16) Aggregate Interactions & Interaction Rates.  In practice, this all feeds together in a constant, self-catalyzing or autocatalytic social loop.

Interactions drive awareness (personal + aggregate).
 Awareness exposes options.
  Options demand coordinated actions.
   Coordinated actions drive further interactions (restarting the autocatalysis).

Note that this reinforcing cycle occurs only IF:

Interactions remain diverse, and
 Feedback remains diverse, sent and received.
  Tempo remains high-energy.

17) Aggregate Context Awareness.  Note that an alert, aware and responsive aggregate occurs only if new components (kids & grandchildren) are quickly aware of the latest challenges motivating their nation, not just the old ones.

18) Perceiving & Exploring Aggregate (& local) Options.  All of the above only KEEPS happening if kids and grandkids remain aware that yet another context WILL inevitably appear, requiring yet a a bigger perspective to master. That way they will fully expect that challenge to appear, & will go looking for it. In the process, they will also keep building bigger perspectives on where they are and what new options are appearing, & will consider HOW to generate utilize ever more diversity (a bigger toolkit). All this will, quite coincidentally, lead them to practice coordinated use of their social+technical toolkit on an even greater scale. This is, incidentally, what humans have always done. We've just grown so quickly that we've temporarily forgotten the most fundamental lessons that our ancestors knew. Quite literally, we can't see our context for our details, precisely because there are so many of us and we're not staying as connected as we could and should be.

19) Survival is the Sum of [Aggregate Actions + Diverse Component Actions].  We can now reiterate an old truism. Making a whole greater than the sum of its parts involves a cascade of cooperative adjustments in order to achieve a shared, Desired Outcome. That's what coordination means.

20) Sustainability.  What has kept the universe, Earth, biology and humanity going all this time? It is common to say that adjustments occur only after challenges. Yet it is also true that those that survive challenges are those that had already started or continued preparing to make even more adjustments. If we are going to survive by continuously expanding our adaptive rate, then we need to make accumulation of coordination skills become our primary Desired Outcome. Ultimately, that's the best way to ensure that we'll be able to go anywhere and become anything .... regardless of the challenge.

  How do we achieve sustainability? Don't stop doing #'s 1-20, above. Add #21. 

If America only knew what Americans know ... we wouldn't have to worry about our sustainability, or the prospects for the 7th generation yet unborn.

   ###############

* Indirection, an alternate route to the same place; i.e., if the front door is locked, crawl in through a basement window in the back of the house. There are multiple paths for bypassing every obstacle.

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".

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.