Risky Play

Anyone in charge of almost any kind of organization, throwing a party, running a business, etc., will want it to build up to a point where it’s exciting, but not to where you loose control.    You usually want things to approach the edge of stability, but not go over it.   It’s fun, and in business, makes money and gets the most out of everyone.   

 

Perhaps the deep sort of common experience that explains it is playing with a water hose as a kid.   The fun really begins when someone turns up the pressure and the person holding the nozzle at the time (usually one of the girls) gets scared and lets go.   It wasn’t the pressure so much that made the hose go out of control, but naturally slow reaction times in correcting minor mistakes holding it steady that multiply.   Everyone flees screaming their heads off, having a wonderful time.    It’s the same edge involved with the inherent thrill and danger of speed.   Playing the edge of control makes a great contest with yourself or others, and going over it in a harmless way, is often huge and memorable fun.    Dangerous play, like driving ever faster up a mountain road, is huge fun too.   Only those who know the fine edge of what is and is not play survive it, however.

 

Unfortunately our economic system does not know where that fine edge is at all.   It has no brain.    Over the past few centuries it’s been huge fun always exceeding our expectations, even granting that it’s been more fun for some than others.   However you rate the experience, though, as operated the world economy is positively destined to go out of control.   Continually multiplying the through-put of a system necessarily leads to multiplying mistakes in controlling it, i.e. destructive consequences as critical signals multiply faster than competent responses.   Where I think you can see that today is in critical issue overload.   The common thread to all our competing great world problems is that they can’t be solved because people are distracted by all the other multiplying great world problems.   There are also a certain number of poignant glaring mistakes being made and going unattended.   

 

Many of us would point to one or another favorite issue, loss of security, loss of rights, rising major climate change, extinctions, etc.    Some of us have long and growing lists.   Here are two I’m really bothered by.   The US is attacking terrorism in a way that terrorizes the major religious community it comes from.   It seems basically incorrect and profoundly dangerous.    In comparison, perhaps it’s just perfectly laughable that the controlling political movement in the US is trying to restore simpler times at home by disabling government functions and shifting government debt and taxes from the rapidly growing part of the economy (investment) to the completely non-growing part (wage earning).   It doesn’t fit our myth in several ways, granted, but seems to be happening.  It’s totally operatic!

 

So this is what I think.   Growth has been fun for a long time, mostly staying on the fine edge of play.   That has apparently ended.    There are things that can be done about it, to get the fun and fair play back, non-disruptive and highly effective things potentially, but paying a price of another kind.   It’s a new kind of physics that touches personal matters.   For some it would be admitting we’re licked, when every bone in our bodies refuses, only because reason paints a vividly clear picture of the alternative.   For some it would be admitting that humanity is just another living thing in the sense of having a life of growth and maturation like anything else, with no special dispensations on that part of life of any kind.   For some it would be feeling queer about the need for inventing a new kind of control strategy.  We need to make a global group decision, yielding to self-interests so plainly drawn that we choose to give up what many feel is a sacred right, to passively multiply our savings, in order to retain continually evolving stable free market business and political lives.   

 

I have an unusual vantage point, and my writings are frequently found to be unsatisfying because of it I think.   It would really help me make my work more accessible if you complained about where it falls short, over-reaches, seems just plain wrong or unbalanced, or whatever.    I seem to somehow have learned how to look at complex natural systems, those things where the whole is greater than the sum of their parts, from the inside and outside at the same time.   Most people just don’t recognize that things that grow even have an organizational inside.   Most people don’t recognize that their own image of the world even has an outside.   Yes, having a strange perspective is problematic, and a pain in some ways, but it also exposes tremendous beauty and occasionally fabulous choices where there seemed to be none before.   It apparently came from and continues to be, I guess, a somewhat risky form of play.

By 2020 - The Year of Clear Vision

By 2020 the investors of the world will see their self-interest and stop compounding their returns, allowing the global economy to climax at a high stable rate of change, forestalling the climax of investment by expectation failures, environmental collapse, conflict and mistakes.

The real limit of economic growth is mistakes. I mention this because exponentials are spookily explosive, seem like nothing & follow w/ major affects. If you see a road sign saying 'Curve Ahead' you know if the car starts tipping it's too late to slow down. The curve of an exponential gets ever more radical the further you take it, and it's a mistake not to slow down.

The explosively increasing complications of growth are already quite evident. Look at how nearly all responders to Katrina were disabled by confusion. That's what information overload does when things really matter. I think many people failed miserably, but can't entirely fault them for being dumbfounded with deciding what to do in the midst of a general system failure. That's what Katrina was, and it can go global. Soon we'll see this as inherent in the exploding complexity of endlessly accelerating change, and that it is an absolute and dangerous limit to economic growth.

Seeing growing errors from making huge decisions too fast brings the problem home. Look at global warming and the historic frequency of radical climate change. Long Island is just a sand bar after all, and it's not outside reasonable possibilities that we'd have to significantly abandon it. Take the 30 year failure of wage growth and exploding deficit spending and completely impossible long term budgets that disguise it. We have all kinds intractable problems that are different in kind from any that humans have ever dealt with, like the one addressed here. How do we calm explosive economic change when all the financial drivers of it seem so inviolate? Self interest. Our great problems are too big, changing too fast and seemingly hopeless, it’s all bad news, over our heads, and most people are just not interested. It becomes apparent that we will be making major changes in how we live, either the easy way or the hard way. Against all indications, I think we'll choose the easy way. Having to cope with a failed global system is simply not part of the standard business model, and someone’s going to notice.

Fortunately an actual ‘easy’ way exists, and it's kind of cool, more than a little radical, but possible and cool, and matches the core problem to a ‘T’. There's a built-in control valve. We can choose to cap our historic cultural and economic leap from the Middle Ages (starting 600 years ago when growth began) and maintain a high stable rate of change. It can be done with a suspiciously potent but simple change of habit, spending investment returns. Multiplying the returns on investment by reinvesting them is the direct mechanism of exponentially driven change. Letting go of only the multiplying part would allow the economies, otherwise largely unaltered, the freedom to continue rapidly evolving. Government will give us better information about natural systems, but there would be no threat to free market individual or business decisions. We'd go forward with fresh purpose and vision earned from the experience.

Spending the returns is also the one non-disruptive way to bleed excess pressure from economic bubbles (if you can identify the parts). It might be done in massive emergency quantities in order to reverse the collapse of what you could call the 600 year bubble, presently building. It might be possible to turn the clock back a little after otherwise irreversibly beginning a collapse. More study of the option would clearly be needed, but it's basically just the readily available option for individuals to ask their investment fund mangers for their gains in order to spend or donate them. One simple way to start would be a tax policy to eliminate taxes on investment returns that are consumed, i.e. passed on to others with no lingering strings attached.

That and further steps in the same direction would raise sales, employment and incomes, reducing government expenses and raising government revenue, and by rejuvenating them, slow disinvestment in established businesses, methods, skills, plans, purposes and people... maintaining the real level of investment at or near it's highs, allowing continued rapid change. What makes it possible to see all this, is considering the system as a whole, and studying the kinds of evolving systems that achieve changes of state, that we might copy.

Construction Estimate

The question is what's our exposure on global warming. For one small part of it we may need to build a 10 foot high sea wall on the entire world coastline. My guestimate is that that would be about $5,000/ft for the cost of straight forward construction on solid ground. It would be far less than the reimbursement of property owners for the first 10 ft elevation of their property. The earth's coastline is about 844,000 km, though I doubt that includes the intricacies of wetlands and estuaries etc. The places where environmental protection, waterfront access or shipping locks and other things are needed would also add to the cost. Maybe you'd just say screw it and screw them with half the world's coastline and cut the losses with that part of it. The places that wouldn't be saved from rising waters by a sea wall include big sand bars like Long Island New York. It's just a pile of sand, and it leaks. They already have a problem with salt polution of limited fresh water and ten feet of sea water might make it largely uninhabitable anyway. Given that we take a few losses like that, the base cost of the sea wall is about $13 trillion, with some significant upside risk and liability and some embarrassing possible savings. Hmmm.... What could we do with a spare $13 trillion and the remaining shreads of our integrity (as if we had it to spare) ?

-a great lecture on the paleoclimatology http://www.agu.org/webcast/Overpeck.html -

Looking up the cost of scrubbing the CO2 you find various things, that maybe there's no way to do it, from an environmental group (http://groups.msn.com/AAEA/carbondioxide.msnw), and that "direct air-CO2 capture may be able to compete with technologies for reducing CO2 emissions from vehicles and other small or mobile sources" from University of Calgary researchers (http://www.businessedge.ca/article.cfm/newsID/10181.cfm). Their plan is to use direct air extraction of CO2 in locations where there are efficient ground storage strata. If that worked it would allow global barter of licensed pollution shares and control of greenhouse warming without changing all our energy technologies. Hay, I got an idea, lets do that! Note, this is hardly a comprehensive review of the technologies out there, but I think quite accurate about the relative panic situation we are actually in. Yes the cheapest CO2 reduction measures at present are probably still in conservation, but conservation is inherently a diminishing return and producing multiplying returns with it is contradictory. Yea it's complicated, but let's hope someone around here is about to take the Earth seriously.

There's still an obvious question, where do we even get the money for the cheaper solutions? Here's where I gloss over all the details and leave you with a disconnect. The one large uncommitted asset for change is always the returns on investment, the flow of funds individuals usually use to reinvest and multiply their personal influence and future returns in a changing world. In all natural systems that same flow seems to exist, but gets passed on freely, effectively composed of rewards for good work received passed on as rewards for good work done. It's the pass-through of legitimate earnings into legitimate earnings that gets blocked by reinvestment and is causing the mounting 600 year bubble we're presently in. See, I glossed over everything and left you with two ropes, one in each hand, and maybe no way to connect...