Category Archives: among best

among best, Natural Economy, Natural systems, Policy discussion, Popular

Was Shareholder Value What Did It??

1 Comment

Preface:   The 1964 SEC rules change seems clearly connected, but what really happened to so dramatically change the whole economy at the end of the 60s??   Figure 1 below shows that something DID abruptly change the whole future of the US economy, in about 1970, causing a permanent great acceleration in societal inequality.   Figure 2 below also clearly shows the pattern of trading on the US stock market began to radically change in 1965 too.   There’s also other evidence mentioned below on what happened.  The Marketplace.org radio program 6/14/06 gave another part of the story for the evident sudden change in the relation between Wall Street and Main Street.   They said it was what Milton Freedman wrote in the NY Times in 1970:

  • The big change began with a professor. At the University of Chicago, economist Milton Friedman (who would later win the Nobel Prize) wrote this in the New York Times Magazine in 1970:
  • “There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits.”

The coincident magazine article almost fits the data…, but when did a single comment by an economist suddenly change the world?   Never of course.    So I think it was some deep change in the rules of business, that may have  been made possible by the SEC rules change of 1964.   That the break was so sudden indicates pent up pressure for it that was suddenly released.  The smoking gun is that the bottom 95% of household income levels suddenly went from growing together with the whole economy, to splitting apart.  It reflects some kind of fairly sudden reprogramming of business.  We were just computerizing everything, and standardizing new business and stock market accounting methods, so that would have to be somehow connected.  The new definition of business value as the “bottom line” was being standardized at the time, along with maximizing “shareholder value”.  Those changes would seem to have served anyone being paid in proportion to profits, shareholders, stock traders, executives… and to disadvantage everyone else.   [1/1/2018]

_______

For those less familiar with my work, I study an evolutionary development form of physics, using explanatory principles of physics to ask leading questions about how complex systems rapidly reorganize and change form, perhaps the most inexplicable thing nature does.   The clue is that it is generally associated with the rapid expanding organization process of growth.  Other scientific methods treat it only as a numerical shape, but there is much more going on.   Much can’t be explained, but what can be firmly predicted is that any growth process produces a crescendo of change, that will upset its own process and cause it to change form.   We should all learn to study that transition.

_______

2016 forward:  

In the figure below, the economy as a whole is shown continuing to grow as before, while the various levels of household income suddenly split apart.

Whatever the change, it would clearly be catastrophic for the resilience of wage earning communities.   The question remains whether what kind of culture change is exhibited in the data.  Was it as I’ve suggested made possible and facilitated by the comprehensive SEC  and Congressional revision of the stock exchange rules in 1964.   Outwardly the SEC’s purpose was to bring the markets into the modern world, to make it more convenient, secure and efficient.   Other things were happening too, seen in the trading data (2) in how suddenly after the rule changes were passed the behavior of the NY Stock market dramatically changed.   There was an immediate wave of high volume trading unlike the past, seemingly ushering in the culture of fast and high volume trading for “playing the markets” we’ve seen since.   It notably also included a redefinition of business value for the sake of the markets, redefined to be a single number, “the bottom line”, introducing the widespread use of the term to represent a new way of market savvy business.  

If you think about how it might effect businesses, to be graded every month as succeeding or failing to make the “grade” set by market prediction of business value, it’s clear what a force it might become.  For CEO’s and board rooms across America would be forced to make decisions favoring the expectations of the market.  I have not found it yet, but my view is the some center of business thinking was discovering how much profit could be squeezed out of the economy if business was managed by computer for that purpose, and that was the pent up pressure that needed rules for rapid trading, ready to go as soon as they were in place.   It would change business and investor decision making like school teachers required to “teach to the test”.    As we know that raises grades an hollows out the student’s education.   Here driving American businesses to meet the numbers, to please Wall Street set for “maximize profit at any cost” was very costly.  Driving stock price increases with continual forced “efficiency” and “productivity” gains naturally drains a system’s resilience, as a real kind of enslavement.   It requires endless cuts that dismantle what had previously been thought of as “good business”.

_________________

Prior study since 2010:

My first notes on the subject were in 2010.   Your can find lots of examples of complexity itself being a natural limit to growth, and I initially associated this change in how the economy worked with the rapidly emerging complexities of life.  We all experience life as a growing struggle, an escalating “rat race” of new complications, and a constant search for simpler answers.  Clear evidence is found in the sudden rise in use of the phrase “information overload”, from the late 60’s on.  At the same time there has been slowing use of the word “complex”, I think indicates the complexity of things stopped being of as much interest.   Those issues are discussed in: Complexity too great to follow what’s happening… ??   Then in 2012 I realized 1970 was also when computers started being used to manage business complexity, as the first “killer app” of computing really.   The global effects would include giving business management a growing information advantage over others, telling them what can be cut and remain profitable, and making business financial analysis based purely on numbers rather than judgement, and somewhat incontestable, as discussed in: Computers taking over our jobs and our pay?

These preliminary studies still seem valid, but fairly incomplete.  They didn’t really explain why the change occurred in 1970, or why so sharply.  That is what the SEC rules change of 1964 now helps to provide.   It appears that the implied “fitness function” of business was redefined to advantage the stock markets and executives, and hollow out the economy for everyone else, in effect violating all of Isaac Asimov’s laws of robotics, as the first big thing we thought of doing with automation.

_______________

The Rules That Wrecked the Economy

It takes a little time to explain the evidence, here showing the long record of US GDP growing by leaps and bounds for 120 years.   Overlaid are Household income levels, scaled to equal GDP at 1970 so their proportional changes are displayed.   Household incomes are seen perfectly tracking GDP from the 1940’s to about 1970, and then start to dramatically fall behind.  It shows the economy completely stopped “lifting all boats” in 1970, completely disproving the endlessly promoted business lobby idea that how to cure the “malaise” was to give the rich more money.   Households suffered from the having to manage the ever faster growing complexity of life, but without the growing resources.   It might not have been intentional, but these trends do seem to literally display 40 years of US households being increasingly devalued, cheated out of the economic value they created, even as investors were cheated too, by businesses being driven to develop unsustainably, only becoming a great public issue now.

US GDP growth & US Income Levels falling behind, Incomes are scaled to 1970 GDP to compare rates, following GDP growth to 1970, then lagging and splitting apart.

The next figure shows the behavior of the stock market at the time when the SEC rules bringing “efficiency” to fast trading and market manipulation by traders, a 14 year record of NYSE trading frequency beginning at 1960.   You can clearly see how the strongly pattered trading followed right after the rules were implemented, as a dramatic change from the sleepy manner of trading before. You might also be curious about the 40 year record, from 1960 to 2000.

A 14 year record of NYSE trading frequency showing a dramatic change right after the new 1964 SEC trading rules were adopted.

When you see a genuine behavior change like how the trading volume suggests a “sleepy” market from 1960 to 1965 followed by a market of manic movements thereafter, it means people have really changed what they’re doing.   I’m not completely sure how well my hypotheses about that behavior change will hold up, what it was and what effect it had.   I have a rather good record on a number of other things, though, so I think they’re at least rather close.

I would love to have help going more deeply into how the culture change involved took place.  The SEC annual report mentions a number of meetings that might have been involved, and getting those notes might be very valuable.    The documents I found most useful so far are a 30 pg excerpt from the SEC Annual Report of 1964 and a NY Times article reporting demand for “the bottom line” .  The latter interestingly reports on the woes of bankers, as if not sure of how businesses defined their values, as an argument for reducing the value of businesses to a single number in a quarterly report.  I think that way of redefining the value of businesses shows a clear “spin” favoring the fast trading culture about to emerge.   It quite neglected the possible effect on the lasting values of businesses, that seems to have been the mainstay of Wall Street thinking before.

__________

Work to be done includes

  • updating the data from original sources
  • more detailed study of the 1964 SEC rules and their adoption, amendments, and “side agreements”.
  • studying why the rules were a pivotal  “breaking point” for a rapid large scale culture change in how American businesses are managed and how the new style trading cause business practice to change

No doubt there would be grand scale malfeasance discovered, and perhaps prosecutable criminality too.   As what happened is really culture-wide, I think finding criminality would depend on when the original meaning of “fiduciary duty” was lost, that would be the basis of requiring financial managers act in the interest of the people they make decisions for.   The main crime seems to be self-destructive, a culture change.  The ideal policy would be to guide people to understanding their own errors and learn how to follow a new path.   New York City, like all the “money centers”, is directly implicated in needing to find a new way to make money, for example.   For 50 years money centers have depended on maximizing the extraction of wealth, not securing the future of wealth, and so have relied on promoting disruptive innovations with no heed to what was disrupted…  No fury seems adequate to express the stupidity of that,   What is does indeed come down to is finding that those money centers will shortly “be out of a job” unless they become as creative at helping to put the world back together as they were at ripping it apart.

Added work to do includes:

  • further studying the very special problems of societal manias…. as that is what we see here.  What sort of “policy” can one have for societies taking the wrong path, having wandered SO far from creating a world to live in that can last.

If you think of money as physical energy, money being what we use to release our use of it, you can think of the global economy as a rocket ship.   The problem of course is our culture having settled on operating civilization that way, as a rocket ship, programmed to only accelerate and never land.   Our main societal “business plan” is to multiply our energy use, investing to accelerate our fuel consumption as fast as humanly possible, forever.   Of course to do that some money and energy are reserved for keeping people somewhat happy, but if the policy is for maximizing growth rates every other purpose is secondary.    So here’s the question, how do we change course when changing course is nowhere in the plan?   Do we shove the drivers out of the vehicle?    Do we hope to explain to them the use of the gas peddle, steering and breaks?   There may be equivalents in the rocket ship already, but the driver seems utterly unaware of them conceptually.  It’s a lot to explain, and a lot to learn,

  • collecting our understanding of real scope of the problem

The ancient legal principle of “fiduciary duty” is a deep principle of professional practice requiring professionals to act in the interests of those they serve, and another example of selective redefinition for for managing money.   There probably is a clear history of successive misleading revision, with a legal paper trail to follow for how it came to be turned on its head to serve mainly the self-interests of trader paid for their extraction of short term profits, not for serving the interests of the people whose money they traded.    I appears that legal opinion now holds it to actually prohibited for traders to consider anything than short term financial returns as the interests of investors, even though no one is served by that except traders and CEO’s who are paid in % of short term earnings.  That is the complete opposite of the original intent, of course.    So the redefinition of “fiduciary” seems to have come from cultural blinders like those that produced the SEC rules of 1964 too.

Another, even clearer example I’ve noticed, I also spent a lot of time thoroughly documenting.  It’s how all manner of scientific principles are being willfully ignored in managing the world survival project called “sustainability”.

One certainly can’t fault anyone stumbling through this confusing time, making sincere efforts to learn about how our very complex world can come to work again.  We’re in a period of unprecedented permanent change in who we are, not planned by anyone it seems.  That said there are also large systematic errors one can find in the efforts people are making, related to persistent influence of money. One very consequential case is in efforts to reduce environmental impacts that businesses are responsible for use, using widely circulated very unscientific rules for counting them.  The standard for environmental accounting instruct people to measure the global impacts of their use of the economy as what is recorded locally.   How that “slipped” by so many world institutions and communities is what’s shocking.

People are just told never to count the impacts of using money (even though that’s the main thing causing all our global impacts).  If you’re not allowed to count the impacts of money it limits your view to your boundary local observations.   So sustainable cities don’t count the resources consumed from outside the city. The same applies to national measures of sustainability, like Sweden not counting the external energy consumption for either the majority of their income and consumption. that happens to be outside its national borders.   I’ve published and written on this extensively, and tying it all together in my UN proposal for scientific method for steering world sustainable development, a World SDG.   It starts out very simple, learning to do the math right at least, and leads to giving people a full understanding of what our money pays for.

I’ve also studied fairly deeply how all these confusions could arise.   Is there something wrong with our minds if our effort to hold onto reality is fraught with difficulty?   What would allow the meanings of important words to unexpectedly change, largely unnoticed?   The line between the words that are and are not prone to radical change is between definitions we get from experience and ones we get from other people.   Most words directly refer to natural patterns of life and our own experience of them. They really can’t lose their root meanings as new variations on their meanings accumulate over time.   The problem is with words defined conceptually, social agreements and things like the economy that we can’t really observe, and so only understand abstractly.    Being unable to distinguish between those terms of conceptual thinking and words for natural experience, we tend to trust what ever usage of any kind is current in our immediate cultures.   So in the money world, or in any social or professional or religious community too, people may be making up new abstract meanings for convenience that may drift widely from one group to the next, and over time, and not be noticed.

That inability to distinguish between natural and conceptual meanings seems to spill over as part of all our problems.   We rely on natural and scientific language for grounding our idea in the patterns of nature, but we’re at risk if we can’t check the wandering meanings of our other languages.   At present though, the scientific meanings of natural language are not being taught, and our scientific thinking is limited to the classroom, lab or office.   We might try to find how to use scientific principles to check what we’re told to believe, and may wonder if conflicting interests have distorted.

That’s more or less what I’ve done, collected some things I see how to go back to nature any time to double check, to help show were work is needed to get the story straight!   ;-)

__________

(draft in progress)

JLH

among best, For teachers, Mail & Comment, Natural Economy, Natural patterns, Policy discussion, Popular, Stories & Experiences, Uncategorized, What to do

Next thing to “make it in NY”?

Leave a comment

Short version Voted a Top Comment on the Forbes article
“The Stock Market And Bernie Sanders Agree — Break Up The Banks” ,
a more full story follows.

The reality of the matter is as embarrassing as it could be. If you trace it all back to origins… it’s our very own greed causing the whole mess, our demanding that Wall Street produce ever faster growing **unearned income** for our investments.

That’s what is now backfiring on us as the serious scientists all always said it would. The earth is not an infinite honey pot… is the big problem our not so big hearts and minds have in grasping the consequences of our own choices. We simply failed to notice the consequences, or listen to those saying “beware of what you ask for”.

The truth is WE became “The Sorcerer’s Apprentice”* and now we are dealing with having turned the planet into our Fantasia. The truth is that if we “Break Up the Banks” the financial system we designed to grow unearned income will just keep multiplying the disruptions the scientists always pointed to it causing! Are there options?? Well find someone honest who studies it perhaps…

 Sorcerer’s Apprentice http://goo.gl/Zu69yD
(If  this YouTube copy is inaccessible sometimes you may need to find another copy or just recall the heroic tragedy of it all, from the last time you saw it.)

Day after the NY Primary 2016:

In New York State yesterday there seemed to be a lot of answers, but we can all see more questions too. Neither Trump nor Sanders are offering practical ways of doing it, but clearly raised a huge chorus of “throw the bums out”, without actually identifying “who the bums are” as part of the questions left hanging. To the surprise of many Trump’s win was so persuasive it seems to almost legitimize his candidacy. To the surprise of many as well, Sanders overall persuasively lost to Hillary Clinton, and only had persuasive wins in conservative upstate areas. In ultra-liberal New York City, his claim to ultra-liberal leadership found really very few neighborhoods persuaded. New York is the kind of place that needs no persuasion at all on the legitimacy of his issues, but found his manner and inability to say what he’d actually do, and relying on a constant stream what had to be called rather misogynist digs.. caused him to lose legitimacy.

So nearly all agree the bums need to be thrown out, but “who the bums are” remains unanswered, and largely undiscussed too, The Trump campaign colorfully claims the intention to disregard all the rules to “get the raccoons out of the basement”, and with no strategy but public outrage, sweep away the broken Republican party and Washington DC political establishments. Sanders imagines that some executive order breaking up the banks and popular demand for relieving very real and widespread despair will remove all the barriers to doing that.

I’ve studies these problems in great detail for many years, and have in fact been expecting to have to somehow claim to have predicted this kind of grand societal collision with itself from the first time I caught a glimpse of the real problem. My observations are only a little more detailed and focused on locating who has a choice, who actually is “at fault” in that sense, as the natural disaster at the end of capitalism has been has been long predicted for what I see as all the wrong reasons for centuries.

That real problem is that “Wall Street” is the name given to the practices of the financial traders who trade everyone’s investment funds, and so… “Wall Street” actually already works for us, and doing precisely what we ask it to do. There’s just something profoundly confused about what we ask it to do. We ask it to manage the use of our idle savings to produce profits to add to our savings, and so multiply in scale without end except for letting the trader take a share of the spoils, Of course the bargain is that multiplying your profit taking from your world with no exception eventually destroys your world, invisible only if you don’t look.

I don’t know quite why Goethe did not sharply identify that ultimately seductive bargain with the Devil when writing Faust. That play is apparently his morality tale about what happens when making that bargain. He was, though, enough more clear in depicting it in his balladic poem Der Zauberlehrling, that Walt Disney used as the basis of his ever popular animated film Fantasia, and very pointed fable “The Sorcerer’s Apprentice”.

Our hero, Mickey Mouse, steals a look at the sorcerer’s book of secrets and immaturely calls upon its magic to command his broom to carry the heavy water of his chores, so he can sleep all day. As he awakes he finds the magical broom can’t be stopped, as Micky doesn’t know what spell to cast for that, and is flooding the whole house and castle, and so MUST be stopped. Then like people feel today, Micky picks up his ax to do in the boom for good…, but finds in chopping up the one it only multiplies magical brooms and the rising flood turns into a great torrent.

As Mickey sleeps his magic brooms multiply, and his effort to chop them up has the opposite effect, not knowing the magic to make them stop.

The failure of Mickey’s strategy would, of course, be repeated if Sanders’ grand gesture calling for “breaking up the banks” were to actually be applied. The various banks that have now grown overwhelmingly big, magically carrying our water so we can accomplish ever more without work, will all just continue expand, as long as we ask them to use our savings as before. You would just get more banks accumulating more disparity in the wealth of the world. Whether the phrase “break up the banks” refers to dividing up the banks into smaller ones, or separating their savings and investing functions, it wouldn’t alter a bit the basic service they are being asked to provide us as investors. They’d still be using our idle money to multiply, in some magical way, so we can be showered with fruits without labor, and left with the puzzle of why that can’t keep working.

Investors may or may not feel “wet”, but if you look around the world, everyone else does look rather soaked! It’s a quandary that we’ll have to resolve, why the secrets of creating wealth were apparently not shared by our process of enjoying wealth. So what’s clear, at least, is we now have a new job. It’s not one that Wall Street asked for, perhaps, but that they can’t refuse as they work for us. It’s to break with the Faustian bargain we made with ourselves, and perhaps stumbling some also stumble without regrets so much as anticipation, get about the work of showing the world another side of what we can do with our genius.

Here we don’t find ourselves without a plan of action, is what’s different from the many calls to protest, though the plan may need repeated adjustment and improvement in various ways. It’s ironically not like Bernie’s plan to “not take Wall Street’s money” either. It’s indeed to “take Wall Street’s money” we belatedly realize, because Wall Street is in fact just managing our money for us, and we just need to as for the right thing. That’s the real way to break our bargain with the Devil, that we do seem to be at a great historical point of rejecting. We can take our knowledge of wealth with us too, but only if we learn the other tricks needed to leave the earth whole and to share.

among best, Mail & Comment, Natural patterns, Natural systems, Pattern Language, Research & Measures, Scientific theory, Stories & Experiences, Synapse9 Work & Links, What to do

A pitch for introducing bigdata “system recognition”

Leave a comment

The following is written for circulation in the “data science” research communities, on some advances in scientific methods of system recognition I’d like to share.  It starts with mention of the very nice 9 year old work published by Google on “Detecting Influenza Epidemics using search engine query data”  taken from a letter to that paper’s authors.  Take the reference to be to your own work, though, as it involves system recognition either in life or exposed by streams of incoming data.

empirical evidence of systemization

I expect a lot of new work has followed your seminal paper on detecting epidemics as natural systems.

But are there people starting to focus on more general “system recognition”,
studying “shapes of data” that expose “design patterns” for the systems producing it?

Any individual “epidemic” is a bit like a fire running it’s course, and sometimes innovating the way it spreads.   That change in focus directs attention to how epidemics operate as emergent growth systems, with sometimes shifting designs that may be important and discoverable, if you ask the right questions.  You sometimes hear doctors talking about them that way.   In most fields there may be no one thinking like doctors, even though in a changing world it really would apply to any kind of naturally changing system.

Turning the focus to the systems helps one discover transformations taking place, exposed in data of all sorts.  One technique allows data curves to be made differentiable, without distortion.  That lets you display evidence of underlying systems perhaps entering periods of convergence, divergence or oscillation, for example, prompting questions about what evidence would confirm it or hint at how and why.

Focusing on “the system” uses “data” as a “proxy” for the systems producing it, like using a differentiable “data equation” to closely examine a system’s natural behavior.  In the past we would have substituted a statistic or an equation instead.    By prompting better questions that way it makes data more meaningful, whether you find answers right away or not.   I think over the years I’ve made quite a lot of progress, with new methods and recognized data signatures for recurrent patterns, and would like to find how to share it with IT, and collaborate on some research.

Where it came from is very briefly summarized with a few links below.  Another quick overview is in 16 recent Tweets that got a lot of attention this past weekend, collected as an overview of concepts for reading living systems with bigdata.

I hope to find research groups I can contribute to.  If you’re interested you might look at my consulting resume too.  If you have questions and want to talk by phone or Skype please just email a suggested time.

Thanks for listening!    –     Jessie Henshaw

___________________________________________

fyi – 350 words Continue reading A pitch for introducing bigdata “system recognition” →

among best, Natural patterns, Natural systems, Popular, Research & Measures, Scientific theory, What to do

16 Tweets on Reading #BigData for Life

Leave a comment

Working with BigData, especially learning how to read the designs and behavioral patterns of the earth’s natural systems, its living cultures of all kinds, and to sense our roles in them, opens up a tremendous new field of understanding.  It of course also opens up very new kinds of perspectives to puzzle over, both offering to show us new paths and making it clear various reasons to question what we’ve been doing.  

This series of Tweets came out in a group somehow, mostly in this sequence today, seeming to build a framework of interconnecting points, like tent stakes and poles maybe, a design for hosting ways to do it.    ……Jessie

  1. What we talk about becomes society’s reality, so we can read #BigData for what’s happening #following_all_cultures and #resources_on_earth.
  2. And what may matter most in #BigData is going from reading abstract patterns to reading naturally occurring ones. http://synapse9.com/jlhCRes.pdf
  3. Then add the magic of learning to read the patterns #BigData reveals, as exposing the designs of the natural systems producing it.
  4. Reading #BigData for natural patterns shows you even the best data doesn’t show what systems are producing it. 
  5. No degree in #data_science will neglect pattern recognition for understanding the natural systems creating the data.http://www.synapse9.com/pub/2015_PURPLSOC-JLHfinalpub.pdf
  6. If our world #economy is causing trouble for the #earth, why do we think it helps to speed it up? #Get_real_people!

    Escher
  7. Are @google, @IBM or other #BigData #research teams learning how to read design patterns of natural systems?? http://synapse9.com/jlhCRes.pdf
  8. To start reading natural systems in #bigdata look for cultures made individually, clustering or growing from seeds.

    from PURPLSOC 2016 http://www.synapse9.com/pub/2015_PURPLSOC-JLHfinalpub.pdf
  9. Then follow recognizing nature’s cultures with learning from them, going back and forth between models

    from PURPLSOC 2016 http://www.synapse9.com/pub/2015_PURPLSOC-JLHfinalpub.pdf
  10. When reading #bigdata for behaviors of cultures also note contradictions in the news, like #jobs_going_to_Mexico and #refugees_escaping_too.
  11. #BigData exposes surprising whole system views too, #professionals managing systems of growing inequity, disruptive change and impacts too.
  12. #BigData reveals living cultures: business, economic, social, biological or ecological, etc. all either: homeless, home seeking or enjoying.
  13. As you see their forms you realize two things:1) our world is very #alive and 2) most #bigdata is too “big”, making you look for other views
  14. To read #bigdata as views of shifting cultures, alone or together, pushes a #whole_system_view for units of measure. https://synapse9.com/signals/2014/02/26/whats-scope-4-and-why-all-the-tiers/
  15. A #whole_system_view, like #studying_the_camera not what’s in its view, is how to start seeing ourselves in the data!http://www.synapse9.com/jlhpub.htm#ns
  16. Sixteen Tweets on reading our world in #BigData, it’s many moving parts, units of measure & big recognitions required.

ed note: One tweet, that became #11, was rephrased and put in a more logical location a few hours after the first posting.

jlh

among best, Mail & Comment, Natural Economy, Natural systems, Policy discussion, Stories & Experiences, Transformation, What to do

Did Keynes & Boulding both really say that?

Leave a comment
  • ed note:   The current discussion of the core dilemma of capitalism, as a limitless system for creating growing wealth, is in terms of the crises we now face caused by it, producing socially disruptive innovation and growing financial inequity.   Those include  1) threats of rapidly growing social inequity, 2) unsustainable national and private debt, 3) disruptive scales of job loss from globalization and automation, 4) demands for unachievable ever faster and ever more complex learning and change , 5) the rapid depletion of earth’s resources, 6) disruption of the climate and earth’s ecologies, and of course 7) increasing international conflicts between conflicting economic interests,  and of course,  8) growing risks of grand scale financial collapses due to failing promises, as a kind of general list.  It’s quite a list.   There’s been a very long debate but mostly scattered in pieces and hidden from view.  That’s both because the primary culprit is our whole way of life, naturally hard to talk about, and what to do with “money” .
  • The design of our economic system that defines “capitalism” is very simple.  It’s “the use of investment profits to build up investments”.  That’s it.   Why such a simple practice has a hold on us is that it promises both society and individuals ever faster growing profits without growing work.   Of course that tends to end up badly, having been much too good to be true from the start.   The equally simple design of all natural systems is that “any system needs to build up to get started, and then stop building up to continue”.  The two definitions conflict.   Keynes and Boulding foresaw that the two would come to blows, once the economic system had built up and needed to stop building up to continue.   They saw capitalism could become like a natural system and can change only if investors spend their profits.  The sense of it is that investors would “pay it forward” so their profits would take care of the future rather that keep “paying it back” so old money could take ever more from the future.  It would let our economic system first build up, and then stop building up, to be able to continue, with no guarantees but as a possible path forward.   It’s all too simple as a design problem, as how all enduring natural systems develop and needs the social principle to make sense.  The dilemma is completely unsolvable as a financial problem within capitalism, though, challenging our  whole way of life as a rather immediate concern.   jlh 3/14/16 

____________

The intensification of work for concentrating wealth and profits.  – Click – to see QuarksDaily article on how this process drains our world.

 

_____________

from a 21st century view……

Your question is,  do we all use our profits to extract increasing pay back from others,
building up an ever growing drain on what makes our world profitable?
______
Or do we pay our profits forward to assure our world remains healthy
to grow our own ideals, our families, our communities and our world,
treating profits as a gift to what matters?
______________

 

J.M. Keynes and Ken Boulding were early and mid 20th century “whole system thinkers”.   They were true geniuses, struggling for words to convey how complex systems with all independent parts work as a whole somehow.   It’s truly the profound puzzle of nature, how illogical it is that all the independent parts of systems would act as if they were all coordinated.   They didn’t stop at just looking for simple rules of prediction having no idea where they came from or when they might change.    They also looked for and found elementally simple organizing principles of design, for how the parts of market economies coordinated with each other as whole systems and what drove them, central principles they weren’t able to communicate and that have yet to be appreciated at all.   From their views they did each say that:

the world economy would soon bankrupt itself by over-investment,
as a natural limit to unlimited financial growth,
due to the central driving financial practice of compound investment

Each was also a expansive thinker with their own ways of speaking about broad principles, so they are hard to read too.   It’s only by learning to think about the economy as a whole system, with all its parts working together, and distributing its surpluses and shortages throughout all its connections, that you can piece together from their writings the common finger prints for the above simple principle as what they were clearly saying.

I had some extra help with it, though.   I learned of Keynes’ work on the natural limits of finance from speaking with Ken, having gotten a chance to ask him in person, if he knew of any economists who had studied the limits of compound investment as a natural limit to growth.   I had asked Ken about it in 1983, and was able to understand what he said on the subject, because I had been searching for a few years already for anyone else who had discovered the principle, that growth systems, if not interfered with, would naturally upset their own conditions for growth.   It’s a completely invariant natural principle. Continue reading Did Keynes & Boulding both really say that? →

among best, For teachers, Natural patterns, Natural systems, What to do

Just a thought…

Leave a comment

We talk about making connections…
. . . . . . . . . . . . . . . . . . but what is it that actually “connects”?

uhp-of three domains

Making Connections in life mysteriously needs to start and finish, and then perhaps establish a long sustained or a short relationship.  Often we don’t see quite what’s happening till it’s either all over, or has really begun to noticeably develop and notice the rapid rates of change.

Sometimes we have an ‘inkling’ that something is changing at the very beginning, before anything really observable is apparent, as if becoming aware of the ‘germination’ of the whole event with an initially very slow building of a “new pattern”.  It may be that intuiting “something changed” is experienced a bit like “feeling a change in the force” .   We may imagine foresight for things that don’t develop, of course, and learn to just be watchful and not jump to conclusions, but wait till a real pattern of proportional scales of accumulation are evident.    That’s ‘the pattern’ of systemic transformation.

What is perhaps the best indicator is always the “building process”, that as the illustration indicates is very much the same accelerating then decelerating accumulation of working parts.   It’s *not* a numerical process, but if you notice the scales of change changing scale it can help you locate what is really working.

The illustration is of course also about the connections between the natural system processes of building, and the learning processes of building, and the holistic design processes of building, that I hope to get to see emerging as a “connection”!   The PURPLSOC meeting “Elements”   and  PLoP meeting “Mining Living Quality”  papers on “Guiding patterns of Naturally Occurring Design“, are full of these stories, maybe too much to enjoy all at once till you get a feel for this unusual way of approaching the study of “how things work”.

You might try a novel way of reading, other than beginning to end.  One I often use with new books on unfamiliar topics is just “picking a few sentences at random” to see if they go anywhere for me, or trying the discussion topics at the end of sections or the whole work.    Today I’m writing this post to take a break from the long task of doing the final edit of the main papers, seeing a need to have ‘something’ new on RNS, having noticed some scratch notes for the illustration made a couple weeks ago I thought would be fun to work on.

jlh

among best, Natural patterns, Natural systems, Pattern Language, Research & Measures, Scientific theory

at PURPLSOC, then at PLoP: Pattern Language for Object-Oriented Science

Leave a comment

…. The distinct possibility is that, for the first time:

Science might soon be able to study all the objects of nature, in their innate form
not just the models we make based on what data is available…

______________________

In-depth Pattern Language Research
“Guiding patterns of naturally occurring design”

1) For PURPLSOC 2015: on “Elements”  (final for publication)
2) For PLoP 2015: on “Mining living quality” (meeting draft)

                                             ______________________

To recognize

  • Individual organizations,  Complex natural designs,  Emergent forms of naturally occurring design,
  • Evolving organization & behavior of complex whole systems, 
  • Discovering more and more of the hidden interior designs of lively whole systems…

One way of  introducing the “what” and “how” comes from a “pattern language approach” to the science of “naturally occurring systems”, presented in a paper for PURPLSOC:

Pattern Language becoming a general language of object oriented thinking and design in all fields.

Guiding Patterns of Naturally Occurring Design: Elements

that I presented at the July 3-5 PURPLSOC pattern language research meeting in Krems Austria.  It was in a group of papers on pattern language as a general science; with papers by Helene Finidori, Helmut Leitner, Takashi Iba Et. All.; Christian Aspalter & Reinhard Bauer. (links to follow)

As an approach to working with natural systems “Guiding Patterns of Naturally Occurring Design: Elements” seems unprecedented in using a fully scientific method for focusing on the “objects of nature”, using a pattern language approach to identify working complex relationships of natural designs, in their natural contexts, with nothing “held equal” or represented with models, a practical way to relate to the “things themselves”, as “known unknowns”.

The key is not to avoid data and models.  It’s not to rely to heavily on them.   It’s to just never use them to represent natural systems, but only to help you discover why naturally occurring systems and their complex designs are of real interest, and doing things quite different from theory.   It turns out that Christopher Alexander’s pattern language, as a structured language for discussing holistic solutions, as designs for recurrent problems, has now evolved to let it jump from one profession to another.   So, if the branches remain connected to the root… it seems to make a good foundation for building a new language of science, one that doesn’t replace nature with the abstractions of boundless theory.

The paper is a “sampler” of explorations of the topic, including an advanced “starter kit” of methods, terminology and examples, for how to use the patterns of natural design to guide efforts at intentional design and integrate with our world of natural systems.   It introduces a way of recognizing natural designs as ‘objects’ in nature, with their own individual boundaries, allowing separate discussion about what goes on inside and outside, and using pattern language (not abstract models) to make verifiable sense of it.  Identifying a boundary is what permits considering what goes in and out, and open up the use a traditional use of terms of physics and economics, for understanding the thermodynamics and the coupling between energy budgets and financial budgets, etc. for natural systems.   Based on that, it would appear to make a true “object oriented science” a practical possibility.

The original paper introducing this from a traditional biophysical scientific point of view, as “Whole Systems Energy Assessment” (5).   That paper can perhaps now be understood if interpreted from a pattern language viewpoint, as showing that shares of GDP measure shares of global impacts of delivering GDP…  The economic system does appear to work as a whole, and the effort to validate that seems to successfully result in a far more accurate, and far more actionable,  measure the impacts of our choices than efforts to directly trace economic impacts can produce.

For the translation of these and related natural system principles to the language of Alexander’s “pattern language” for defining “object oriented” principles of holistic design see the 2015 “Guiding patterns of naturally occurring design” papers  for PURPLSOC (Pursuit of Pattern Language for Societal Change) (Jul 5 2015) (1) and PLoP  (Pattern Language of Programming)(Oct 23 2015) (2) and related slides and supplementary materials (3).   Also in the directory is a YouTube video link to the first 15 minutes of the slide narration, for the July 5 presentation of ‘Elements’, salvaged from a cell phone recording (4).

“Guiding patterns of naturally occurring design”

1) For PURPLSOC 2015: “Elements”  (final for publication)
2) For PLoP 2015: “Mining living quality” (final for publication)
3) Related materials: Resource directory 
4) 20 min. YouTube video excerpt of the July 5 talk –
5) “Whole Systems Energy Assessment (SEA)…” part of the physical systems science being translated into PL 

___________________

Need to update & add notes and discussion on both conferences….

It was really exciting to be part of, and to watch this new way of thinking emerge, PL as a whole system language for “designs of services” to balance and support
the traditional view of  science as a whole system language for “defined controls“

JLH  11/5/15

among best, Mail & Comment, Natural systems, Scientific theory, Synapse9 Work & Links

But how can physics study behaviors, not the theory?

Leave a comment

On @SFIScience David Pines, Co-Founder of the Santa Fe Research Institute wrote Emergence: A unifying theme for 21st century science, describing a critical need for physics to develop a way to study “emergence” directly, as a natural phenomenon, not just a theoretical models.  This article reposts my reply to him on Medium: But how can physics study behaviors, not the theory?

For understanding the emergence of new forms of organization in nature, the study of theoretical models seems not to be yielding the kind of useful understanding we so critically need now.   What I introduce is a”dual paradigm view”, to address the dilemma, a better technique for learning from nature directly.  Computer models are fine for testing theory, but need to be used differently to help us follow the continuities of nature.   There is a very big conceptual hurdle, getting mathematicians to study the patterns of nature directly…   The physics based method I developed, using models of probability to help locate individual developmental continuities offers a direct way to address the problem Pines raises.  It could genuinely offer complexity science a better way to study their actual subject, and couple their theories to actively occurring emergent processes and events. Among other discussions of it on RNS Journal:

– a”Dual paradigm view” Can ecosystems be stable?,
– Finding Organization in Natural Systems – “Quick Start”
– Can science learn to read “pattern language”…?
– In two words… what defines “science”?
– ‘Big Data’ and the right to human understanding.
– What is a “rights agenda”, with ever increasing inequity?
– Sustainability = growing profit then steady profit

Emergence is what we see from cosmic events to the flocking of birds…

 

David Pines makes a very intelligent assessment, saying in part “The central task of theoretical physics in our time is no longer to write down the ultimate equations, but rather to catalogue and understand emergent behavior in its many guises, including potentially life itself.”

I was one of those who figured out why that would become necessary back in the 1970’s. The behavior of complex systems of equations that permit true emergence will not be knowable from the equations. It’s not just their complexity, but that their emergent properties are emergent and dependent of histories of development rather than being formulaic.

I have also been writing papers and corresponding on the problem very widely since then, and really wondering why I was so unable to get systems thinkers, from any established research community to join me, in studying the commonalities of individual emergent systems. I started with air currents, that generally develop quite complex organization quickly with no apparent organizational input, behave very surprisingly, and seem individually unique.

I actually developed a fairly efficient scheme for studying any kind or scale of emergent system, using the simple device of starting with the question: “How did it begin”. What starting with that question does is immediately shift the focus of interest to considering systems as “energy events”, that you consider as a whole in looking for how they developed. That approach also directs you to look for the event’s naturally defined spatial and duration boundaries, which are highly useful too.

In addition to being fairly productive as research approach, it also made it easy to skirt lots of spurious questions, like “how to define the system”. With that approach your task is finding how the subject defines itself, still looking for a pattern language of structural and design elements to work with, within and around the system, confirming what you think you find.

What I finally arrived at in the 90’s was that the equations of energy conservation implied a series of special requirements as natural bounds for any emerging use of energy. I was thinking that the issue was how nature uses discontinuous parts to design continuous uses of energy, and in working with the equations noticed that the notation for the conservation laws were either integrals or derivatives of each other.

Then one afternoon I just extrapolated an infinite series of conservation laws to define a general law of continuity, and integrated it to find the polynomial expansion describing the boundary conditions for any energy use to begin. It was a regular non-convergent expression, a surprising confirmation of Robert Rosen’s interest in non-converging expressions for describing life, and became very useful as what to look for in locating emergent processes to understand how they worked. I circulated the proof for discussion many times, submitted it for publication a few times and wrote numerous introductions, the following the most recent:

Continue reading But how can physics study behaviors, not the theory? →

among best, For teachers, Natural Economy, Popular, Stories & Experiences, Uncategorized, What to do

Kepler

Leave a comment

…and the laws that move you from maximizing power to maximizing resilience.

Like many young college women Kepler awoke that morning with other things on her mind than the project she had planned for the day.  She had been dreaming about how she loved her drawers of personal things, in colorful piles, neatly rolled, in little bags and folded, each in its own style and fit together.  Maybe she would become a “collector”, she thought, they gave her such a thrill.   How nature was “quite a collector” too fascinated her too, creating all the natural world’s very special arrangements, with everything having it’s own individual home, utterly improbable in such number and variety, and so highly organized and grouped with fitting parts everywhere.

She’d also been told that lots of scientists thought nature’s patterns came from a natural law of energy, that everything sought to maximize its power, which honestly, just made her wrinkle her forehead…   She did not know, of course, but thought there was something hidden in the magic of how things in nature so often yielded to each other, an obvious secret to how things come to fit so closely.   So she quietly thought perhaps that seemed at least or was perhaps even more important.

What she had planned to do that day was use her old graphic calculator from high school, to do an experiment in rewriting the history of the economy, laughing as she said it that way.   Could you show an economy as being responsive, seeking to get along, rather than just getting more and more aggressive in looking for, in the end, how to get in ever bigger trouble?    What would it be like, she wondered, if people could be responsive as a rule.  The idea had come up in reading that the climate change scientists, the IPCC, had said we needed to reduce world CO2 production to half what it was in 2010.   It was only recently in fact that the world economy had been below that, and now everyone was saying we had to go back but probably couldn’t.    She felt she had all the facts, though.

So she had the idea to just…

– totally redraw the history of ever growing CO2
– to show mankind as being responsive to the approach of climate change

She didn’t get it to work till quite late that night, but it worked!    What she had of course been thinking about, and felt that anyone who mattered constantly worried about behind every other subject, was the strange continual way the human society was so energetically trying to destroy its own future.   The evidence could not be more clear, with the ever faster consumption of everything useful on earth, that an economy maximizing its growth unavoidably does.  Anyone can plainly see that happening, as climate change keeps accelerating faster than expected. Everyone hears about the ever increasing loss of natural species from disrupting ever more natural habitats too, and the impossible debts nations have accumulated making their decision making impossible, and so many other disturbing things.

It wasn’t a “debate” to her.   It also wasn’t her “cause” either.   She also did not really see it as her job to change other people’s minds.    It was just something she personally needed to know, about her own life, and whether it could be meaningful. Continue reading Kepler →

among best, For teachers, Natural systems, Policy discussion, Transformation, What to do

‘Big Data’ and the right to human understanding.

Leave a comment

One of the fascinating scientific subjects I research is how human understanding comes from narrative. Without getting too technical, narratives about relationships, environments and culture change issues come from people “observing the flows” of the natural processes, the flows by which those changes in our world take place.  The basic starting point, then, is having some way to observe those flows.  No awareness of the flows, *no story*!

This is such an important thing for combating our alienation from the breakdown of traditional cultures, really all around the whole.   It’s quite an unfortunate side effect of the great eruption of wealth in modern times, and the ever more intense global competition fostered by the world economy doing it.   A small part of how it disturbs our ability to tell stories about what’s happening to us in yesterdays post What is a “rights” agenda, with ever increasing inequity?

 

Mining live stories from big data is way to build human understanding

Use maps of natural silos of conversation to find who you need to talk to and how!

I ran across five wonderful examples this week alone, of ways to bridge the enormous cultural and intellectual divides the keep us from arriving at a common understanding of what to do with the earth.     My topic yesterday saw how an economy structured to produce both ever increasing complexity, inequity results in the breakdown of traditional cultures and ways of knowing, a loss of stories for giving our lives meaning.   Learning to see the problems can also be used to find solutions too, of course, the main one here perhaps just learning to see what we’er doing to ourselves.   The thought process leads to seeing what strategies are failing us is not so different from that used for discovering promising new ones.

One identifies where the cultures that guide us lose track of what’s happening to them.   The other discovers exposes the flows of events in a way allowing us to create the new stories that will matter in our lives.   It’s how all human rights are achieved, by recognizing them as the clear story that beings order to a disruptively changing world, recognizing how nature connects the dots, letting us frame not just “good stories” but also “true stories” about finding a sound new path.

The practicalities of recognizing “what’s really happening” so we can use our values to fashion the stories telling us what to do will mostly not need a lot of big words and shiny promises.   You can do it with “big data”, even if today its main use seems to be for controlling personal data to make growing amounts of money from deny people their individuality.  You can also us it to mine the data world to pick up clear signs of whole new cultures emerging you’d otherwise never be aware of, for example.   Having ways of visualizing the eventfulness of change globally, on many dimensions, would be a very *different* kind of “news feed”, a true globally holistic “news feed”.

Every community could study the eventful flows of changing relationships, personal, cultural, economic, ecological, that matter to it, rather than just listen to media largely composed of chattering entertainers and politicians after money and power.   If a way of mining data for signs of events could show people what’s really happening to their world, and that became the the talk of the community, everyone could participate in shaping the news and the new stories about our human rights tell us to do.   It would give the media a real story to cover too.   The practical job to make that possible, though, is more like science than philosophy.     It’s to learn to recognize that eventful change comes from the emergence of new forms of organization, that generally begin with a viral burst of development, that energize whole systems, altering the balance and roles withing their environments, like organisms that growth from a seed to build new natural capital or flame out.

Shown as the general stages of growth for a new form of organization, from novelty to maturity

Examples

1. –  Changes in Word Use – I am not an expert in semantic analysis, fundamental changes in word use, particularly if following a clear developmental pattern generally do indicate a change in the world of people and their way of speaking about it.    Developmental changes in word usage expose important cultural experiences of the people writing the text.   I’ve used comparisons of the Google histories of word frequencies obtained from scanned libraries of books, their “Ngram” tool. I’ve also used the histories of word use in magazines, newspapers and even Google Scholar, such as to identify

Along with the various other “story mining” methods discussed in the introduction to my scientific method for mining the stories of natural change processes, and method of interpreting them:

Learning to read the eventfulness of our world  –  People who have some personal experience with the environments in which these explosive changes took place, as eruptions of new organization for those worlds,  these documented records of the shapes of their stages of growth provide rich reminders and new challenges to imaging what was really going on to produce the new environments the created.

Papers on “General Systems”(yellow), Papers and Citations for “General Systems Theory” (black & pink)

“Pop Corn” flurries of articles on sustainability as the subject emerged in the NY Times, and Accumulative trend

 

The 1990 beginning of the big eruption of mentions of Hip-Hop in the NY Times also coincided with the historic sharp decline in NYC crime rates, culture change as kids changed who they looked up to.

Use of “complex” followed  growing economic complexity up to ~1960, when we appear to have either lost interest or the ability to keep up, with the fast increasing complexity of our world.

Today one might also use Twitter and other social media, and also collect data on product and book sales and lots of other sources.   Of course, the sources would vary considerably from country to country, but the method would be the same.   What’s important is for the text or numeric data being scanned for “natural coupling” be “neutral” and not influenced by the subject being explored.

What might be possible, putting it all together, is to identify natural cells of social relationships and their interests, cultural “silos” of relationships identified by their ways of using language, in real time. There are security questions whenever new kinds of information are made available, so such maps should be abstract. The most valuable feature of such a “map” of connections, though, is the ability to then see who’s NOT connecting, the isolated constituencies.

You’d see what conversations are intense in one group and missing from another, say between Twitter and the local newspaper as one possible divide., defining two communities with differing values and interests. That would be a great tool for understanding a society, and a great tool for social activist groups, letting them see how to stop “preaching to the choir”, for one example. It wold also give them insight into the words and interests of the groups they need to connect with, but hadn’t known how. Seen that way it’s a “partnership tool”, allowing people to see through the silo walls just enough to make some connections.

More examples, links, applications & … stories Continue reading ‘Big Data’ and the right to human understanding. →