George Dyson -
…our 21st-century global computing platform is still running a 13th-century banking system, and the resulting performance sucks. In any hydrodynamic system, the non-dimensional Reynolds Number characterizes the ratio between inertial forces (the result of mass and velocity) to viscous forces (the result of the inherent stickiness of the fluid). When the Reynolds number reaches a certain critical value, the system changes from laminar to turbulent flow. There is an equivalent to the Reynolds Number for an economic system: the ratio between the speed (and amplitude) at which currency is flowing through the system to the viscosity of the financial medium. The Reynolds number of our electronically-mediated economy has recently gone way up, with destabilizing results. The latest problem is that automated programs — -the barnacles of the New Economy — -are now trading *within* the frequency spectrum of the turbulent boundary layer. If this happens to a ship, it will slow down, and if it happens to an airplane, it will go into a stall. Where’s the anti-fouling paint? How to best transcend the current economic mess? Put Jeff Bezos, Pierre Omidyar, Elon Musk, Tim O’Reilly, Larry Page, Sergey Brin, Nathan Myhrvold, and Danny Hillis in a room somewhere and don’t let them out until they have framed a new, massively-distributed financial system, founded on sound, open, peer-to-peer principles, from the start. And don’t call it a bank. Launch a new financial medium that is as open, scale-free, universally accessible, self-improving, and non-proprietary as the Internet, and leave the 13th century behind.
I discovered this quote through Douglas Rushkoff’s blog post here
Economics Is Not a Natural Science. I have included a few prescient bits here -
We must stop perpetuating the fiction that existence itself is dictated by the immutable laws of economics. These so-called laws are, in actuality, the economic mechanisms of 13th Century monarchs. Some of us analyzing digital culture and its impact on business must reveal economics as the artificial construction it really is. Although it may be subjected to the scientific method and mathematical scrutiny, it is not a natural science; it is game theory, with a set of underlying assumptions that have little to do with anything resembling genetics, neurology, evolution, or natural systems.
The economy in which we operate is not a natural system, but a set of rules developed in the Late Middle Ages in order to prevent the unchecked rise of a merchant class that was creating and exchanging value with impunity. This was what we might today call a peer-to-peer economy, and did not depend on central employers or even central currency.
We ended up with an economy based in scarcity and competition rather than abundance and collaboration; an economy that requires growth and eschews sustainable business models. It may or may not better reflect the laws of nature — and that it is a conversation we really should have — but it is certainly not the result of entirely natural set of principles in action. It is a system designed by certain people at a certain moment in history, with very specific interests.
In Chris Anderson’s vision of the coming “Petabyte Age,” no human scientists are even required. That’s because the structures that emerge from multi-dimensional data sets will be self-organizing and self-apparent. The emergent properties of natural systems and artificial markets are treated interchangeably. Like Adam Smith’s “invisible hand,” or Austrian economist Friedrich Hayek’s notion of “catallaxy,” markets are predestined to reach equilibrium by their very nature. Just like any other complex, natural system
We can startup and even scale companies with little or no money, making the banks and investment capital on which business once depended obsolete. That’s the real reason for the so-called economic crisis: there is less of a market for the debt on which the top-heavy game is based. We can develop local and complementary currencies, barter networks, and other exchange systems independently of a central bank, and carry out secure transactions with our cell phones.
Rushkoff concludes his essay with -
The scientific tradition exposed the unpopular astronomical fact that the earth was not at the center of the universe. This stance challenged the social order, and its proponents were met with less than a welcoming reception. Today, science has a similar opportunity: to expose the fallacies underlying our economic model instead of producing short-term strategies for mitigating the effects of inventions and discoveries that threaten this inherited market hallucination.
The economic model has broken, for good. It’s time to stop pretending it describes our world.
Buckminster Fuller also had some relevant thoughts -
Every time man makes a new experiment he always learns more. He cannot learn less. He may learn that what he thought was true was not true. By the elimination of a false premise, his basic capital wealth which in his given lifetime is disembarrassed of further preoccupation with considerations of how to employ a worthless time-consuming hypothesis. Freeing his time for its more effective exploratory investment is to give man increased wealth.
It is essential to release humanity from the false fixations of yesterday, which seem now to bind it to a rationale of action leading only to extinction.
Societal systems are not adapting to information and knowledge. Our hardware is f*cking old, and in many cases, irrelevant. If the systems do not change, the future will continue to carry along the old problems of the past.
Societal inertia moves antiquated relics (societal systems::hardware) from the past to the present while their existence goes unquestioned. Could it actually be possible that the same problems come up again and again because there is a common denominator?
Are policies being enacted to change things as purported, or are the policies being enacted to resurrect a faulty paradigm? Are legislative actions attempting to solve the structural deficiencies that cause problems, or are they merely trying to mitigate the negative outcomes of the structure?
Some ideas going forward …
We should look to transform the economy into a distributed system with more emphasis on resiliency and less emphasis on efficiency by mimicking naturally occurring systems - an ecosystemic approach which encourages bottom-up creation instead of top-down management. The prerequisite is that the laws will have to change to allow such a decentralized system to operate {(ideally, competing decentralized system(s)}. Or we can create new frontiers outside of jurisdiction (Seasteading). Or we can operate them anyways.
Increase the chances for experimentation. Increase the chances for innovation. Increase chances for progress, decrease chances for regress.
