Seeing Flows: Free-Markets, Parasitic Growth, Aquifer Depletion, and Income Inequality

Continued from this post, and, yes, all of these title concepts are tightly related…

My suggestion for dealing with aquifer depletion is to develop canals that divert excessive water from the Mississippi and its tributaries (and maybe even the Great Lakes, if feasible and rational) to anywhere it can be stored or used. Here’s a brief list of reasons why we should do this.

But the main, (seemingly) credible opposition will come from those that would oppose a “big government program” like this. The most common ideological position of this camp is simply that collectivist policies are wasteful and inefficient – and so wrong in principle because in practice they lead to particular individuals unfairly exploiting their ability to take more than their “fair” share – whether that is Chicagoan’s demanding a high price for lake water, Illinois politicians enriching themselves or their friends at the expense of others, or just bureaucrats doing their job poorly by misallocating public funds.

At it’s core, these arguments are all rooted in the idea of parasitic growth. Think of a circular colony of cells in a petri dish, where the cells near the center of the colony will be the first to run out of nutrients and die, while those on the peripheral of the colony thrive as they divide into untapped resources. This is a flow pattern. The death at the center of the colony is dictated by the rate of flow of nutrients from the periphery to the center. In some situations the flow may be “zero.” In practice, there is at least some flow in both directions – with putrefied dead cells eventually accelerating the corruption of peripheral thrivers.

In the case of the Ogallala aquifer – in terms of water balance, Kansas is the putrefied dead cells while Chicago is the water-rich periphery. (But don’t get moralistic about this – in terms of fundamental food production, Kansas is the periphery and Chicago is the putrefied core – and there are countless other “flows” you could consider.) Cells in a petri dish have heretofore been uncoordinated cells – that is, they don’t work together. Ironically, they exhibit a pure form of Ayn Rand Objectivism. They are a “free-market” of Libertarian, self-interested individuals. They also emulate a pure form of parasitic growth and the “bad” things that go with it: unsustainability, seizure of any unprotected resources – and then declaring it as “owned” and “earned”. The key characteristics of parasitic growth are that it is dependent on continual “growth” (that is, a supply of resources at the “periphery”) and that it is fundamentally short-termist.

To see this, just consider what natural selection produced from our humble bacterial beginnings. If you could put something like a human colony of cells in a petri dish for comparison – or have a colony of cells emulate what human societies actually do when they aren’t at war with themselves – it would look more like an ant colony in its arrangement – with channels from the periphery to the core – because human cells cooperate. Cells with “plenty” sacrifice a little and give back to the larger “organism” – whether it’s via blood vessels, interstate highway systems, or books and music. These are all flows – and what makes humans so much more adaptive than single-celled bacteria is the specialization of our cells into distinct types that rely on the community for survival but also contribute back to the community. All of this is a “flow”. Human organisms have longevity greater than most bacteria because the network of flows between our cells is “designed” with this kind of long(er)-termist architecture.

So when Ayn Rand-Libertarians (or the modern GOP) claim that the free-market of self-interested individuals is the best system, remind them that neither their bodies nor our actual social structure works that way – but that there are things that do work that way – like uncoordinated bacteria. They might reply that we humans may look like we’re being charitable when actually we’re just being selfish-buyers-and-sellers as we use those highways and “share” goods. Yes, that is true – but you can look at human cells the same way – a specialized cell (say, one locked into an artery) is not technically choosing to be there – it’s own specialization has caused it to become locked in place. So did the cell choose to be there? Of course not – there is no cell in the human body that is conscious and “Free to Choose.” The fact is that specialization has an inevitable side-effect – it means you are bad at whatever you are not specialized in. That means you are dependent on others for any such needs. The more specialized you are, the more dependent you are for everything else – but you are simultaneously more useful to the group in whatever way you are specialized – you are becoming unique.

Anything that is dependent on others is in a bad negotiating strategy. If others choose to deny you goods (ie, raise the price – like a corrupt politician can) your dependency determines your freedom to choose to do anything about it. But a network of cooperating, specialized agents or cells can “choose” to “work together” and not raise the prices they charge each other for “flows.” In practice, it doesn’t truly matter which way they go in this kind of haggling, and many types of cells within humans have effectively engaged in an “arms race” like the negative case of “raising prices” they “charge” each other. Examples are the extreme skin poison of some salamanders (because the snakes that eat them co-evolved a resistance to the poison) such that the salamanders produce so much poison that any other “predators” would be killed by a mere fraction of the poison. This costs the salamander resources to produce, but that is no matter. It is “stuck” having to pay this price because its main predator decided to “pay the price” of developing a resistance to the lower levels of poison. Another example I just learned about in Stephen Pinker’s book How The Mind Works is the hormone signals between mother and child.

Advocates of modern Libertarianism will say that both of these examples are, obviously, cases of two different organisms (in the case of salamanders – different species) competing against each other, not a network of “related” cells or people working together. “What the hell am I talking about?” they will ask. Well, I could have chosen any of the examples of inter-cellular arms-races that happen between cells within the same organism, but that would obscure a key point. When we talk about “flows” and “systems” you have to be very careful to be holistic in accounting for the extent of the entire system – at least as far as it is relevant to the “flow” being discussed. Salamanders and snakes are just specialized organisms that are, ultimately, related. From a Richard Dawkins Selfish Gene standpoint, even the “replicators” under discussion are somewhat related, since all animals share a large number of genes.

But more importantly, the “flow” being discussed in the “negotiation” between prey defense mechanisms and predator countermeasures includes both organisms. Together, they comprise the “system” that is experiencing the “flow” – because a predator is nourished (or killed) by the prey. The system actually can be expanded for further accuracy, since once either organism dies it no longer directly affects the organism that survived. However, its absence does indirectly affect things – and for more accuracy, the “system” can be seen as all organisms in both species. You could go further and include the entire environment, since that will affect the species eventually, too – and there is no end to the environment, so for a fully holistic look, the system of any “real” flow is the entire universe. In practice, of course, the goings-on in the M33 galaxy aren’t actually relevant for a discussion of flows within snakes and salamanders.

The key problem of Libertarians, then, is that they suppose they can have their free choices and personal responsibility without recognizing the fact that their set of viable choices is drastically reduced by the degree of specialization all around them – and within themselves. They cannot take ownership for cessating their own breathing any better then they can take ownership for failing to survive a meteor strike – or failing to prevent the extinction of the dinosaurs, for that matter. Complete ownership and responsibility requires that you actually have control of all flows that affect you and all flows that you participate in – and that includes the flows of time and information. Complete personal responsibility can only exist in an omniscient, omnipotent being. That’s why faking it always seems to be a statement of personal “power” to some degree or other – but only if the fakery stays hidden. Few things look more pathetic than someone that claims they have complete control over a situation, only to see trivial realities stubbornly intervene.

So when it comes to political issues we (collectively) have a choice – cooperate to achieve minimal transaction costs between people – and experience the efficiency gains. Or hold-out for more and engage in an arms race until one of us is forced to concede defeat – forced to submit to the realities of specialization. (Or any level of cooperation between those extremes). Note, however, that “minimizing transaction costs” can be said to be what Communism was doing with it’s brand of totalitarianism. But we can all see that the USSR was not the model of efficiency. It wasn’t as bad as Capitalist champions want to claim (while disowning responsibility for the inefficiencies of Capitalism and Free Enterprise), but it had plenty of problems. How do we reconcile this?

The answer is that they weren’t actually “minimizing transaction costs.” They weren’t seeing the entire system. They weren’t looking at all of the flows. One example is that while economic totalitarianism – say, price-fixing and disallowing negotiation – reduces wasted time and resources on haggling and price-checking, human beings in general simply don’t like taking central instructions in some situations. The absence of choice feels problematic to us. We need at least the illusion of some amount of choice (and I would argue that Free Will itself is an illusion). This could be developed a great deal, but I’ll leave it at that for now. Another flow the communism failed to address is the simply problem of information flow. Centralized economic planning is only as feasible as the accuracy, relevance, and speed of the flow of economic information in return, and the communists utterly failed to implement adequate systems of information flow for the level of integration they were trying to achieve. This is a flow turbulence problem, so now is a good time for another Reynold’s Number picture.

A Vortex Street: Chaotic, complex flows are not as unpredictable as we think

The bad news is that there is no limit to the information needed for 100.000000% cooperation. It’s like the number infinity – you can always add one to it, and you are left with…. infinity. In the same way, even if you know everything you need to know – if another person knows that, too, and is “free” to strategize against you and chooses to – they can – and in doing so they can simply choose whatever strategy works against your strategy. It’s another arms race. A game of chicken. If all your information says you should move left, your opponent need simply change to do the opposite of what your assumptions had been. Suddenly you must reverse your strategy. And so can your opponent, again.

The Libertarians sense this problem. Their solution is like the conclusion of the WOPR computer in “War Games,” a computer designed to learn the best strategies for playing games from Tic-Tac-Toe to Global Thermonuclear War. “The only winning move is not to play.” Or, as Libertarians interpret the system, “I will only play if I choose to play. If if I so choose, then I will accept the outcome – I will be personally responsible for having chosen to play, win or loose. I bear the risks of playing – or not playing.”

But this rationale is only valid in a system where the Libertarian actually can truly claim responsibility for every factor – every flow – that determines which way they will choose! If there is no Free Will and their choice is simply determined by the orbit of a particularly serendipitous electron in their brain, can they say they chose to play? No – Determinism does not allow room for Free Will. If their choice is random – the outcome of Quantum chaos, say – they likewise have no control over the matter, and can claim no ownership of the choice. This is why Libertarians have an affinity for some kind of Dualism – a non-material mind that is distinct from the brain. They ascribe this immaterial mind the property of somehow being capable of Free Will, but since they don’t know exactly how the brain works in the first place (no one does, yet), this immaterial mind is just a hopeful substitute for the same thing, all over again – either the immaterial mind is Deterministic, Random, or must be omniscient and omnipotent to claim self-ownership. Simply mental inspection can answer these claims, since we all know it makes no sense to claim that you are free to, say, believe anything you want (you can’t control what you believe). And if that weren’t enough, merely ask yourself whether you know what the next thing you will think will be in advance. Obviously, none of us can do that. And if you can’t know what you will think next, then you don’t know if your future mind will come up with a believable rationale to conclude something other than your current conclusion. This means you cannot credibly claim to own your current self, your current beliefs, nor the consequences of either. But we already knew all this, didn’t we? (We wish….)

This means we can’t pull the, “I’ll play when I choose to, and own it whenever that is,” argument. We are stuck “playing” and not owning it, either.

So what do we do? How do we play reliably in a world where we have insufficient information and inadequate power? We do what our cells do. We decide to work together. We tolerate the fact that some of us will not get along – and initiate an arms race. This isn’t a bad thing, by itself – much of what makes us what we are is, actually, based on some kind of “arms-race-flow”. But it isn’t a great strategy to start out with. Our default mode should be cooperation for the long-term, with a tit-for-tat strategy to respond to “arm-race strategizers” – ie “opponents” – but they aren’t 100% “opponents,” either. There’s no absolute moralizing in this game, because no one can be said to have actually chosen to play – or even how they will play in the present.

Thus, collective action with vigilant collective pruning of exploitive people is called for. And when it comes to the water supply in 30 years, either we move people to the water (and out of the deserts), or we build systems to get the water to the people. Frankly, we need food, and to grow food, we need land. That will change one day. Until then, let’s plan ahead.

How does all of this relate to income inequality?

Small-government Libertarians want to see individual farmers and ranchers bear the costs of securing water, such as the tens of thousands of dollars (each) required to drill deeper wells, or to coordinate their own canal system construction, or simply leave the business. All of these choices will induce an increase in the price of food to cover the resulting costs. Problem solved!

But in the real world, individuals find themselves on many points along the income distribution curve (or net assets curve) – the Pareto distribution. The individuals at the lower-income or less-wealthy end of the distribution will actually tend to opt for half-measures – which is slang for short(er)-term solutions and strategies. (Incidentally, this includes “exploitative” choices, like ones that would pollute ground water or crops.)

Yes (to the small-government Libertarians), the “free-market” tends to motivate agents to seek efficient solutions – but that is also a way of describing a parasitic system. The greater the income inequality in a society, the larger the fraction of low-wealth individuals in the population, and thus, the greater the probability of any one individual choosing short-term efficiency over long-term efficiency.

Moreover, when a society finds itself comprised of ever more systems operating on short-term vision it finds itself vulnerable to shocks whenever any flows change or become turbulent. For instance, you can burn a match in a wind only up to a certain speed. Depending on the flame, there is some wind speed that will initiate turbulent flow (where the Reynolds Number becomes important) – and further increases will eventually lead to such flow instabilities as to snuff the match out and make a self-sustaining reaction impossible. Economies and societies work the same way. Turbulent flow is beneficial in all sorts of ways, but greater income inequality in our current social-political-economic structures leads to more short-termism (marked by criminal/unethical behavior, deception, reliance on anonymity, speculation) and from there to economic and social instability.

As if these posts weren’t already too long, in some future post I’ll try to lay out how flow-systems are actually network systems, and from this view you can see a tight integration of things as diverse as macroeconomic flows to the stupefyingly weird world of Quantum Mechanics. In the real world, the flow of any fluid is actually an impossible dance of particles performing quantum leaps in 10-dimensional space. Likewise, the system of human “free will” interactions works the same way, with your “flow” of thoughts mirroring the non-linear, non-continuous flow of a particle, just as the flow of “capital” from “account” to “account” is, in terms of the abstract world of “information,” just another kind of quantum flow with arbitrary boundaries defining balances.

If you don’t see the relationship, I realize that sounds like total quackery. In a way, it is. What is a “flow,” anyway? Is an idealized flow inside a computer simulation more “real” than the quantum mechanical flow of water in the real world? I think it’s meaningless to ask that. All I’m really saying is that the concepts of Quantum Mechanics that ultimately really do define real-world flows are actually relevant to the people like Robert Lucas (and those responding to him) that want to suppose that unless a smooth, macro-level description of flow can be “rationally” understood at the quantum level, the macro-explanation is incomplete. This critique is invalid, and Quantum Mechanics shows why – including its history, with Einstein calling it “incomplete” because he could not accept the idea of particles that essentially do not “exist” until they interact with something. Einstein was experimentally proven wrong. Particles really do not “exist” per se until they interact. In the same way, we will never connect “micro-fundamentals” to macroeconomics within this framework because no one is actually rational – or actually “knows” their own preferences (from a Free Will standpoint) – and because “micro-fundamentals” are based on presumptions of known (that is, declared) human values. These, also, don’t exist – until two humans interact – and their interaction can only ever be predicted in probabilistic terms.

Somewhere in all of that lies Information Theory and the Holographic Principle – but I’m still digesting that. I’m tossing all of this out to the web just in case it inspires anyone else to make mental leaps I could never do on my own. May the conversation never end.


About stormculture

In pursuit of reality.
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