I have been pondering this question about whether a CURRENCY is a set of rules that play out into the future, the state of a whole system at a specific time, or a representation of flows over time that manifested in the past. Linked to this question, is the question of whether a CURRENCY is deterministic and allows prediction about the behavior of systems as a whole, or whether it is open ended and only sets up a ground upon which interactions can play out.
Perhaps we should think about chess. Chess has a set of rules that govern how pieces interact with one another, and it sets up a start point (board at opening) and end point (checkmate) for the system. The rules of chess allow for the manifestation of around 10^100 (a 1 with 100 zeros after it) different games, but the rules say nothing about which game will be played at any given time. The rules of chess are non-deterministic, but they set up boundaries of interaction, i.e. no rook ever moves diagonally. If we want to actually predict the way a particular chess game will manifest, we will have to study intently the history of the players and how they have chosen to deal with given situations in the past. We might even take into account whether the players got enough sleep before the game, and whether there is a lucrative prize for winning. In all cases where we are trying to predict a specific game, we need information that cannot be found within the rules of chess.
Let’s look at a more biological example. Think of an ant colony. The behavior of the individual ants is relatively simple and probably determined in some way by the ant’s DNA, but the actual manifestation of a particular colony is highly complex and non-deterministic. This makes the ant colony quite different from a computer program, which will run the same every time. See Wikipedia's article on cellular automata for a great explanation of how this process differs from conventional computer programming.
A good place to look to unpack this issue further is Ilya Prigogine’s theory of life being a dissipative structure. According to Prigogine, life is an OPEN system far from equilibrium. A non-living system is one that comes to rest as all interactions are played out. This resting point is its state of equilibrium. Systems that are closed tend towards equilibrium, but in living systems equilibrium is synonymous with death. A system is dead when no more interactions are occurring between its constituent parts. This means that life must inherently be energetically OPEN to sources outside the system. Think of the earth as a whole. The earth is open to energy from the sun, and the sun is what keeps the whole earthly dance moving. This means that life is a pattern that maintains cohesion in a constantly changing stream of matter and energy.
The other big piece of the definition of living systems, is that they can adapt themselves to changes in the environment. Warm-blooded animals maintain their body temperature across a wide range of external conditions; ants have adapted to live on six of seven continents, and so forth. A good place to read further on this is Wikipedia’s article on self-organization.
So how does this relate to the metaphors we have been using so far to explore the flow language? Let’s look a circuit diagram. A circuit diagram represents a system that is not evolutionary. Sure electricity moves through the system, but the structure of the system itself does not change depending on the conditions. Even if there are complex relations between the parts in a circuit that do allow it to change to match some external conditions, the determination of how the system will manifest cannot change except by outside agency (the electrical engineer). Hence, it is completely deterministic. Here is where we see the difference between living and non-living systems. In contrast, a living system modifies its own internal structure to adapt to external conditions in novel and creative ways. What is probably going on in living systems is something akin to a bifurcation in a chaotic system. It is inherently unpredictable for this reason, and is determined by conditions within the boundary of the system rather than external conditions.
What makes this all especially complicated is the fact that living systems are within the realm of the biosphere, where as currency is more in the realm of the noosphere (mind). This means that meaning becomes part of the system. In biospheric systems, meaning isn’t really all that important to determining flows, but in noospheric systems meaning is an essential component. I think of currency design as permaculture of the noosphere.
To sum up, in my humble (and very possibly wrong) view, a CURRENCY is a set of rules that govern a particular flow within a complex open system in a non-deterministic way. As multiple currencies interact, even predicating outcomes in the short-term becomes less and less feasible. However, this doesn’t mean that we can’t make useful statements about the system derived from these rules. One feedback loop a currency complex can have is the communication of the state of the whole to the parts. This information flow affects how the parts behave and helps create cohesion in the system. This view of the whole is the holoptic view. In fact, it is the ability of the parts to know and interact with the state of the whole that may give the system meaning as a whole in and of itself.
Tuesday, January 27, 2009
Do currencies describe living systems?
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Not being familiar with the Flow language, I can really comment on the last part. IMO, the goal of a currency unit is simply to reduce a lot of subjective aspects of exchanges to an objective measure (shared by all participants in the system), with the goal of optimizing supply/demand. Obviously the last part requires some form of aggregation, and in current monetary systems, this function is performed by the central bank. But the advent of publication-oriented accounting systems could change that.
I fully support the "advent of publication-oriented accounting systems." However, taking as a cue the work Arthur Brock and Eric Harris-Braun have done, I am no longer looking at currency as being limited to the function of exchange. Their insight was to unify such diverse social phenomena as money, voting, reputation, task management, and so on in one over arching framework describing flows within social systems. This is what the flow language is all about (at least as I see it). It is the details of this language that this blog is trying to hash out. I think this language includes but is not limited to everything you said. Thanks for the comment!
Predictable Living Systems
A non-deterministic system is not quite the same as a non-predictable one. This is where probability comes into play and makes me think we're really on the right track with currencies as tools for expressing/modeling complex, living systems.
[This was once a separate blog post, but now that I can post replies, I've moved it here where it belongs.]
Rain falling on a hillside is non-deterministic. We could never be sure about the path any drop will follow. However, taken as a whole with hundreds of thousands of drops, we can probably predict rather easily where water will run, where it will puddle, where much will soak in, etc.
That is what makes the design of a (monetary) currency SO IMPORTANT in the way it shapes behavior. It is non-deterministic -- it doesn't take away the free will of the actors. You might choose to burn that $20 bill in your wallet, but chances are good that you'll spend it... in a fairly bounded range of ways.
The design of a currency is like the shape of the landscape upon which the rain falls. Each drop follows its own non-quite-predictable path as each person performs their own not-quite-predictable transactions. But one of the things that I think fluency in flow language will make clear to us, is that taken as a whole, the probable pattern is VERY CLEAR.
Like with dollars being issued as debt which bear interest... That interest will compound, daily, forcing exponential growth until the debt load is growing faster than the economy can expand which causes collapse of the currency. The outcome is really as plain as day to anyone who looks at flow pattern.
However, it is not quite as clear exactly what day that collapse occurs. Or how hard the fall will be, because those factors are outside the inherent rules of the currency and are more like your chess game factors of how much sleep the players got or if they're playing for a big prize.
Even some of the pattern outside the explicit currency rules is visible when in play. The Bush administration as it greedily centralized wealth into the hands of the few, accelerated the collapse severely. Offering a "bail-out" which did more of the same (by handing it directly to the bankers) didn't slow the unraveling. Obama's bailout approach, which spreads short-term wealth around, will slow the collapse, perhaps for months or years.
However, they both are rooted in the same unsustainable core principle of dollars as a Ponzi scheme requiring us to perpetually mortgage our future with present debt. We cannot bear the tax burden to repay the "stimulus." It extends the downward spiral of compounding debt toward sure collapse.
Non-deterministic system --> Certain outcome.
Of course, this way lies madness for predicting on an individual level. It reminds me of Skinner's behaviorism and likely why his kids ended up institutionalized. Just because you can consistently get a pidgin to turn left to get you to release food does not demonstrate much flow language wisdom. The model is too one-dimensional to operate outside of a very artificially constrained environment.
Just like in most economic plans or corporate compensation plans where people think they're causing predictable behavior through monetary reward...but the plan is too one-dimensional to connect to the various layers of incentives of a whole human. This becomes painfully obvious when worker productivity drops instead of rises, or consumer confidence still falls even after $350B of bailouts. :)
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