Template:M intro systems financialisation: Difference between revisions

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{{L1}}''General'': The increasing importance of financial markets, motives, institutions, and elites in the operation of the economy and its governing institutions.<ref>Adapted from ''Financialization, Rentier Interests, and Central Bank Policy'', Epstein, 2001.</ref><li>   
{{L1}}''General'': The increasing importance of financial markets, motives, institutions, and elites in the operation of the economy and its governing institutions.<ref>Adapted from ''Financialization, Rentier Interests, and Central Bank Policy'', Epstein, 2001.</ref><li>   
''JC’s own meaning'': The [[high-modernist]] goal of reducing ''[[ineffable]]'' things to their most calculable, and manipulable ''values''. So: [[David Graeber]]’s ''social'' indebtedness versus ''monetary'' indebtedness.</ol>
''JC’s own meaning'': The [[high-modernist]] goal of reducing ''[[ineffable]]'' things to their most calculable, and manipulable ''values''. So: [[David Graeber]]’s ''social'' indebtedness versus ''monetary'' indebtedness.</ol>
====Machine-legible====
The most manipulable, [[fungible]], calculable, aggregatable articulation of [[value]] known to Western society is [[cash]] — [[degenerate fiat capitalism|''fiat'']] cash, sorry [[cryptobro]]s — and it is the common language in which we describe our interrelationships. Hence “financialisation”.


The most manipulable, [[fungible]], calculable, aggregatable articulation of [[value]] known to Western society is [[cash]] — [[degenerate fiat capitalism|''fiat'']] cash, sorry [[cryptobro]]s — and it is the common language in which we describe our interrelationships.  
But we are talking metaphorically here: this is financialisation in a broader sense that need not involve ''money'' as such: Out-of-five product reviews, [[performance appraisal]]s, [[RAG status]]es, [[net promoter score]]s, tac codes — any numerically measurable criteria — anything which can convert the messy, idiosyncratic, intractable experience of life into ordered columns, pivot tables, and scatter plots that can be averaged, extrapolated, enriched, [[Pareto triage]]d, and put into ranked, tranched ''order''.


Hence “financialisation”, but in a broader sense: it need not involve ''money'' as such. Product reviews, five-point performance appraisals, [[RAG status]]es, star ratings, measurable criteria — anything which can be ordered, pivoted, [[Pareto triage]]d, and put into a ranked, tranched order.
====There are no straight lines in nature====


Things that can’t be ranked and counted — that aren’t legible to this great high powered information processing system — have no particular value in it, whether or not that actually have any value. And conversely things that can be counted can acquire value even if they don't have value. There are plenty of examples of this — things that sell at a greater margin than they cost — carbonated soft drinks, bottled water — or bitcoin, fashion, cosmetics professional sports, commercial music.  
Things that can’t be ranked and counted — that aren’t “legible” to this great high powered information processing system — have no particular [[value]] in its terms, whether or not they actually have any value. The unique pleasure you derive from Marcus Aurelius’ Meditations reduces precisely to the amount you are prepared to pay for it over the cost of producing and distributing it. Any greater value — the life lesson, aphorisms and fortitude it magically confers that guide you through through your heaviest seas and blackest storms count for nothing. It is hardly a novel idea to regret that something is being lost hereby.


The will to financialisation distils down to a worldview that analogue, informal, unique, requiring judgment, requiring [[metis]] is expensive, slow and unscalable and therefore ''bad''.
Conversely, things that ''can'' be counted can acquire “value” even if they don't have ''value''. There are plenty
of examples of this — things that sell at a greater margin than they cost — carbonated soft drinks, bottled water — or bitcoin, fashion, cosmetics professional sports, commercial music. Followers. Subscribers. Eyeballs. ''Clicks''. Diversity reduced to a set of arbitrary criteria, characteristics, that can then be catalogued, categorised and analysed. The system can only understand diversity by homogenising it. I mean, talk about ''irony''.


These things used to be ''premium''. Now we have premium mediocre — artificially scarce, novel for its own sake, expensive for its own sake — see above.  
This [[will to financialisation]] distils down to a worldview that the analogue, informal, unique, different, the diverse — all those things that require judgment, patience , understanding, — that take “''[[metis]]''” are therefore expensive, troublesome, irksome, difficult, slow and unscalable and therefore ''bad''.


We are all out here desperately searching for meaning, and it is up to us what we settle for. But if we settle for the premium mediocre the authentic will wither and die.
JC has said this before: if we reorganise our values to suit the machines, ''we will lose to the machines''. Do not surrender before kick-off.


Our own attitudes, and the stories we tell ourselves, and each other, matter. If we settle for premium mediocre that is what we will get  
These things used to be ''premium''. Now we have [[premium mediocre]] — artificially scarce, disingenuously novel, that sapping word, “''[[content]]''” — generated for its own sake, that we pay for, or value, for its own sake — see above.
 
We are all out here desperately searching for [[Man’s Search for Meaning|meaning]], and it is up to us what we settle for. But if we settle for the [[premium mediocre]] the authentic — the ''real'' meaning, value — will wither and die.
 
Our own attitudes, and the stories we tell ourselves, and each other, ''matter''. If we settle for premium mediocre that is what we will get. Until we are replaced.


The ineffable value of [[uncertainty]] and the difference between ''risk'' (a calculable probability) and ''uncertainty'' (intractable, black box, non-linear).
The ineffable value of [[uncertainty]] and the difference between ''risk'' (a calculable probability) and ''uncertainty'' (intractable, black box, non-linear).
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But non-linear loss is the consequence, and corollary of non-linear opportunity and vice versa. If we put our selves on a linear track that approximates the non-linear reality we will be fine until there is actual event at either end. Persuading everyone else to get on the linear track is a good strategy. As long as it works. If you can persuade everyone in the system to behave, the system will “behave” — in the sense of not producing unexpected outcomes, and not necessarily optimising, or producing particularly ''good'' outcomes. Volatility will drop. ''As long as everyone behaves''.
But non-linear loss is the consequence, and corollary of non-linear opportunity and vice versa. If we put our selves on a linear track that approximates the non-linear reality we will be fine until there is actual event at either end. Persuading everyone else to get on the linear track is a good strategy. As long as it works. If you can persuade everyone in the system to behave, the system will “behave” — in the sense of not producing unexpected outcomes, and not necessarily optimising, or producing particularly ''good'' outcomes. Volatility will drop. ''As long as everyone behaves''.
 
====Misbehaviour as arbitrage====
Not behaving is arbitraging: exploiting structural differentials you are not meant to see, and that the loyal behavers cannot see. They may be obscured by the behaver’s internal model/narrative, or by moral principles. In either case arbitrage behaviour is destructive to the present configuration of the system, and those who stand to gain from the present configuration will be hostile to arbitrage. Arbitrage is ''defection''. The system will be set up to make arbitrage difficult, and to eradicate it, that is to say. The system will self purge. To the extent it doesn’t this will be because of novelty — a previously undetected arbitrage opportunity has arisen. This could be a latent arbitrage — that was always there, but no-one noticed, or one arising from new technology, new language or a new independent event presenting itself to the system  
Misbehaviour is ''[[arbitrage]]'': exploiting structural differentials you are not, by the rules of the game, meant to see, and that the loyal behavers ''cannot'' see (or ''refuse to look at''). They may be obscured by the behaver’s internal model/narrative, or by moral principles. In either case arbitrage behaviour is destructive to the present configuration of the system, and those who stand to gain from the present configuration will be hostile to arbitrage. Arbitrage is ''defection''. The system will be set up to make arbitrage difficult, and to eradicate it, that is to say. The system will self purge. To the extent it doesn’t this will be because of novelty — a previously undetected arbitrage opportunity has arisen. This could be a latent arbitrage — that was always there, but no-one noticed, or one arising from new technology, new language or a new independent event presenting itself to the system  


The longer the system has been in play the less likely a latent arbitrage is to have lain undiscovered, and the fewer existentially threatening independent, non-agent events (non-directed, [[force majeure]] style events) there will be. This is the [[Lindy effect]]. New technology and new language arising spontaneously within the system can largely be controlled, if you so wish, but ''extraneous'' technology and language cannot, and for these the Lindy effect does not apply.
The longer the system has been in play the less likely a latent arbitrage is to have lain undiscovered, and the fewer existentially threatening independent, non-agent events (non-directed, [[force majeure]] style events) there will be. This is the [[Lindy effect]]. New technology and new language arising spontaneously within the system can largely be controlled, if you so wish, but ''extraneous'' technology and language cannot, and for these the Lindy effect does not apply.
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