Template:M intro systems financialisation: Difference between revisions

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Things that can’t be ranked and counted — that aren’t “legible” to this great high powered information processing system — have no particular [[value]] ''to the system, in the system’s terms'' — it can't digest them<ref>The digestion metaphor is apt: processing intractable things is like trying to digest flax.</ref> or extract value out of them — it literally cannot “process” them  — this is so whether or not these have any value to ''us''.  
Things that can’t be ranked and counted — that aren’t “legible” to this great high powered information processing system — have no particular [[value]] ''to the system, in the system’s terms'' — it can't digest them<ref>The digestion metaphor is apt: processing intractable things is like trying to digest flax.</ref> or extract value out of them — it literally cannot “process” them  — this is so whether or not these have any value to ''us''.  
=====Value=====
====Value====
Forgive me a [[postmodern]] moment but ''[[value]]'' is a function of cultural and linguistic context — sorry, Professor Dawkins, but it just ''is'' — the richer the language, the more figurative, the more scope for imagination, the more scope for alternative formulations of ''value''.  
Forgive me a [[postmodern]] moment but ''[[value]]'' is a function of cultural and linguistic context — sorry, Professor Dawkins, but it just ''is'' — the richer the language, the more figurative, the more scope for imagination, the more scope for alternative formulations of ''value''.  


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The [[modernist]] yen — imperative — ''need'' — to reduce uncertainty to risk, and the false comfort this gives. The Viniar problem.
The [[modernist]] yen — imperative — ''need'' — to reduce uncertainty to risk, and the false comfort this gives. The Viniar problem.


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 ourselves 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====
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.
So, totalitarian states can survive as long as they have the wherewithal to enforce rules internally, and that is in large part a function of keeping external ideas out. Prime example: North Korea - self imposed — Gaza (externally imposed)
Across the wider system, open architecture, tolerance, pluralism, a plurality of narratives enhance the resilience of the overall system, but jeopardise the resilience of individual actors at the top of the system, who will, hence take steps to close architecture, mute plurality and shut down “arbitrageurs”, whom we can call malcontents. Strong open architecture systems have to have rules and feedback loops that protect that open architecture — entrenched rights of freedom of expression, limits on executive and corporate power, robust antitrust enforcement and so on.
It is not necessarily causative, but also no accident, that The places most obviously associated with those features have had the strongest economies: UK and US. But in both cases these principles are currently stressed.




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