Misbehaviour as arbitrage
|
The JC’s amateur guide to systems theory™
|
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.