[With debt spinning wildly out of control and the States threatening to revolt against the tyranny of Washington, we asked some frequent contributors to the Rick’s Picks forum how they thought the nation would look five years from now. In the essay below, Roger Erickson eschews predictions, asserting instead that we will all have to pull together to meet whatever challenges and disruptions the future might bring. The task can only be accomplished, he says, if we rise above the squabbling of nation states, ideological factions and other vested interests. A model for this behavior, he notes, can be found in doctrines espoused by, among others, the United States Marine Corps. RA]
In what condition will our markets be in, say, five years?
According to the super computer DeepThought (and probably Larry Summers too), the answer is 42. But seriously, in five years, we’ll either be back to investing in national Selection Markets, not just financial markets – or we’ll have chaos. How to do that would require a separate essay, so I’ll just develop the premise for now.
If it’s not obvious, here’s an intro to “group selection.” Individuals tend to forget that we currently survive as a social species divided into nation states. In this setting, group context provides full-spectrum group selection pressure, expressed through group goals/policies/strategies/tactics/outcomes. Sub-markets for tactical diversity, such as ideology or fiat finance, only serve one tiny aspect of the overall selection process – something we relearn whenever national security comes up. (In a previous comment here, one reader reminded us that we’re toast if neighbors don’t have our back.) Since group data are meaningless without group context, it follows that finance markets are meaningless without group goals and campaign strategies. That’s no more mysterious than the dual strategies of Marines: get promoted to where you’ll be personally happy, but only once your group survives! Those dual strategies are inseparable.
For perspective, and Socratic consistency, consider the coordination that has produced existing markets. It is only by keeping the big picture in mind that we can protect ourselves from expedient mistakes that critically limit group options when they’re needed later on. That’s the methodology cultures use to create and maintain group resiliency. It’s far more important than financial markets. (See Lords of Finance: The Bankers Who Broke the World]
‘Reverse Entropy’
Before proceeding, let’s consider some random facts that expand our perspective. Not only has reverse-entropy led to our existing “platform,” symbioses have placed prokaryotic mitochondria in all eukaryotic organisms, and centriole-based sensory structures in both photoreceptors and the hair-cells of the inner ear. Further coordination led single-cell eukaryotes to eventually “domesticate” themselves into multi-cellular organisms, by various methods, from dictyostelia’s selective expansion via cloned sex cells, and back to the dicty-style re-aggregation of separate genetic lineages that human cultures use. (I know, they’re all Marxists!) Yet, it’s clearly one big system, with awe inspiring alignment that we should be careful to respect and leverage – not ignore. Failed group experiments disappear rapidly. Individuals don’t even register in evolution – except through miraculous, rapid adoption by or propagation of new groups.
Despite irrational fear of omnipresent Marxists, how can we consistently leverage system perspective in order to better parse evolving selection markets? For logical consistency, I’ll refer readers first to Socrates, then jump directly to current Warfighting Doctrine and Campaign Doctrine as espoused by the Marine Corps. These doctrines are recognizable to savvy biologists, statisticians, engineers or investors. Contingency management for aggregates with zero predictive power reduces to group coordination rate.
Group Extinction
Members of social species survive by skill in exploring group options. Given, there will always be some political tacticians more or less blind to national outcome or policy implications, who nevertheless stumble upon momentarily effective tactics in support of superficially local aims. (Nevertheless, no context excuses failure. The alternative is group extinction.) As examples, the absolute size of government and fluctuations in fiat currency supply are just two of many tactics masquerading as national goals. Absent alignment to real group goals, we’ll bicker over tactics – unless we pursue another way, pursuit of Force Resiliency in our policy apparatus.
I’ll liberally paraphrase Joshua Chamberlain, circa 1865, “we can’t predict future tests, but we can determine what adaptive kinetics we can generate for novel group challenges”.
We need improved methodology for accelerating alignment to common purpose – because our old methodologies alone no longer work quickly enough for 312 million people in 50 states & several territories. When Rome falls, no amount of resources sequestered from your neighbors will deter the barbarians flooding through the gates.
Our stubborn debate between statists and operationists was already solved, by Ben Franklin’s “table” lecture to the Continental Congress. It’s not the parts, but their artful coordination that successfully defines a “more perfect union.” Yet we spawn more people yearly and must either teach them Franklin’s return-on-coordination lesson, or suffer the consequences of dis-regulation.
Statists vs. Operationists
Statists: “unbalanced spending” presumes that group survival tracks what is/isn’t produced & “spent”, i.e., tangible definitions of wealth – an overly limiting concept rejected by Marines, & biology.
Operationists: “unlimited potential to spend” promotes a superficial view of what leads to survival – i.e., spending alone, in and of itself – also an overly limiting interpretation.
There is a better way, the systems-thinking forced upon survivors: survival tracks coordination, not conflict. Every point of stability in the natural world is most efficiently shaped by a dynamic equilibrium between conflicting forces. The kinetics of that equilibrium, our group adaptive rate and group intelligence, is determined by the catalysts we invent to simultaneously expand and converge group discourse. Population growth alone means we always have a challenge to do more, which of course means “spending” more. We must also converge any additions to new alignment – doing more-in-bulk of a leanest-possible set of actions (“selection” pressure). We must do both, in proportion.
Group adaptive rate defines social survival, never infighting alone. Of course that means more application of more tools, but only once goals and tuning strategies are painstakingly selected. Survival requires places to go and densely engineered group methods for getting there. Hoarding any amount of anything is a tactic, not a goal or strategy. Snails hoard, and limit their own options. Army ants live by their wits, and go places snails can’t. Are we either, or even more?
Relearn…or Disaggregate
Dynamic equilibrium between statists and operationists allows populations to lurch along in Selection Markets that aren’t adequately defined by financial metrics – a mathematical impossibility. To prosper, listen to the Marine Corps and see how quickly we can explore group options and coordinate successful group achievement. We’ll either relearn how to invest in Selection Markets, or disaggregate.
We have zero predictive power. Yet we know that real wealth – survival – tracks ability to coordinate, unlimited by what absolute amount of tangible goods we had, have or will have.
We should invest in our ability to mobilize group responses to future challenges. How are we doing? Hard to tell, since context as well as people are our competitors – witness Japan this past week, the Mideast the last month, and our own banksters since 1980.
Is the mobile internet increasing group knowledge faster than politicians comprehend? It’s the old story of realizing authority lags the pace of change – magnified and accelerated like never before. The next five years should be initially confusing but rewarding beyond our imagination. Revolution with increased general knowledge has never happened on this scale.
“My Son…”
My son: “I’m not entirely optimistic that the next crop of leaders won’t be the same as the old boss, but I guess we’ll see.”
Me: It doesn’t matter. The writing is no longer restricted to the wall, it’s all over the World Wide Web. Simply fantastic! We still can’t predict what will happen, but as always, we can practice how to respond. Perceptive rates (of populations, not bureaucracies) are at least accelerating, from “rate of change” to “rate of accelerating-change.” We’re seeing unprecedented turbulence. Perhaps nothing comparable has happened since Cro-Magnon man swamped the globe?
Answer to Rick’s question? I’m more worried about Selection Markets, not financial markets.
In 2000 thousand years, we’ve almost passed an organizational infection point.
Caesar: I came, I saw, I conquered.
Tom Jefferson: We came, we saw, we made a more perfect union (not they, we).
In the next 5 years, we’ll know whether we’re taking one step forward, or 2 steps back.
That’s why I’m more concerned with how we practice mobilizing our full group responses, not just our trivial financial markets, and not what any other country does. We can’t predict what will happen, but we can prepare to survive and succeed, no matter what happens or what any other nation, or investor, does. It’s been obvious for more than 2000 years that we can do that only through nationwide coordination, not individual effort alone. To me, who’s more expendable, someone on the front lines in a key institution and context, or any particular billionaire whatsoever? Accountants are never rate limiting to contingency management, they’re only useful after the fact, for tidying up logistics. Click here for a closing example that helps us realize what we’re tinkering with, a review of those potentially dismantling U.S. democracy from the inside – innocently or not.
