I am reminded of some thoughts I had after reading a response in an advice
column. A husband wrote that when he and his wife disagreed about something, he
would often graciously do along with her wishes with the expectation that the
next time they disagreed it would be understood that he had earned “brownie
points” for having been so considerate and therefore his wife would not press
her case too vigorously. But unfortunately his wife didn’t share that
understanding. The columnist suggested that they institute a system of brownie
points. When they disagreed, the husband might say, “I will go along with your
wishes if you grant me two brownie points”. The wife would either agree and 2
brownie points would be formally added to the husband’s account or the wife
might say, “Two brownie points is too much” in which case the husband might
offer to trade his acquiescence for one brownie point or to offer his wife two
brownie points in exchange for her acquiescence. My first reaction was that the
idea was brilliant. The spouse who was most desirous of winning would bid the
most brownie points so each of them would get their way on those issues that
mattered most to them. And on those issues that seemed equally important to
them, the system would force them to trade wins on some issue for losses on
others. But then I noticed some annoying practical problems that the advice
columnist had not addressed. Suppose it was clear that an issue of very high
importance to both of them was looming. Would it mean that whoever had the most
brownie points in the bank would be able to win the big issue? In that case,
negotiations over relatively minor points that arose before the big issue,
might see both parties willing to acquiesce in exchange for points that could
tip the big issue their way. Maybe the spouses could be allowed to borrow
brownie points. This wouldn’t necessitate establishing a brownie point lending
institution, but simply allowing one to have a negative accumulation of points.
But then there would have to be a control of some sort otherwise one of the
spouses could simply outbid the other spouse on each issue, thereby getting his
or her way each time. The other spouse might have leave an estate worth
millions of brownie points but what good would that be?
I have two questions: (1) Has anyone created a workable mathematical model that
would allow spouses to solve political issues by using brownie points? (2) If
the brownie point problem is fundamentally unsolvable, is the same true of the
use of money?
________________________________________
From: [email protected] [[email protected]] On Behalf Of Steve
Smith [[email protected]]
Sent: Saturday, January 10, 2009 12:26 AM
To: The Friday Morning Applied Complexity Coffee Group
Subject: Re: [FRIAM] Financial crisis [was bye(?)]
Russ -
Well said.
A friend of mine once asked the following question:
If you were building a house, would you stop just because you ran out of
"inches"?
The analogy is that $$ are simply units of measurement for work or useful
assets. Do you cease to do the (same) work or (use) the assets effectively
just because the units you used to measure them changed in some way?
Rumor has it that the depression ended pretty abruptly as the US geared up (on
credit to ourselves?) to provide manufacturing/hard resources to the Allies in
Europe to fight the Germans. If we thought of $$ as hard assets (conserved
quantities) themselves, then the "competition" for "scarce resources" from
Europe should have somehow *crashed* us even harder... but instead it
invigorated us.
I'm obviously/certainly not advocating (yet) more war... the"New Deal" and
"WPA" and "CCC" and the like had already created an "artificial demand", when
coupled with "minting more 'inches'" was helping...
I can't comment specifically on "Obama's Plan" (I'm just not tracking it
closely) but in principle, a re-organization and re-motivation of our
collective efforts could be a seriously positive thing to do about now.
Refactoring our economy/society is both scary and maybe necessary (or
inevitable)? Are we on the verge of a Punctuation Mark in the ever-famed
Punctuated Equilibrium? Or is there a way for the system to "re-organize"
itself to absorb/dissipate the internal stresses without cataclysmic change?
- Steve
So let's talk about the financial state of the world for a while. It certainly
is worth of a complex systems discussion list.
Here's my basic analysis. For the past 2+ decades we have been engaged in a
self-inflicted Ponzi scheme -- during more or less the same period in which
Madoff was doing the same thing but to other people. We (the entire world) did
it to ourselves. We recently reached the point where it became clear that it
really is a Ponzi scheme and that the money we all thought was there isn't.
That's actually not a particularly complex systems issue. It's pretty
straightforward. Lots and lots of people have a lot less money than they
thought they did. (See this nice
piece<http://www.theatlantic.com/doc/200812/financial-bubbles> about bubbles.)
The question is: now what?
One of the interesting things about a financial crisis is that nothing is
actually destroyed. No manufacturing plants are damaged. No power plants are
destroyed. Nothing is bombed. The world's farm land has not been poisoned.
Nothing physically has changed. It's just that a lot of people now know that
they have a lot less money than they thought.
One thing that's happening is that people are a lot more careful about spending
money. That ripples through the economy putting people out of work, which
causes even less money to be spent, etc.
It would seem that it should be possible to achieve a new stable state. But no
one seems to know what that state will look like or what can and should be done
for people who are suffering during the transition. It's also not clear whether
the monetary and fiscal policies are helping us get there.
So it seems to me that the basic questions are: what are the possible new
stable states and how can we get there with the least pain?
P.S. By a stable state I don't mean a government-run economy but one that is in
relative equilibrium -- but obviously not complete equilibrium or there would
be no evolutionary progress.
-- Russ
On Fri, Jan 9, 2009 at 6:21 PM, Phil Henshaw
<[email protected]<mailto:[email protected]>> wrote:
There is much further to fall, and I think it's likely the Obama plan will
aggravate the failure of the system and push it over the next edge. It will
certainly not relieve it of strain and allow it to heal.
The Obama plan is designed by the same theory that caused the collapse, and
intended to pump up the process of harvesting multiplying returns from our
diminishing, dangerously unstable, and increasingly unresponsive set of
physical resources. If we pull out all stops to continue on that path as
intended it will probably push the system to a significantly greater failure
that may be relatively permanent.
The only thing that will work is for the people who have financial claims to
be paid more than the physical system was able to produce to rescind those
claims, i.e. come to a realization that having taken too much money out of
the system enough debts need to be forgiven or enough money put back as
needed to relieve the system of unachievable obligations to them.
Phil Henshaw
NY NY www.synapse9.com<http://www.synapse9.com>
============================================================
FRIAM Applied Complexity Group listserv
Meets Fridays 9a-11:30 at cafe at St. John's College
lectures, archives, unsubscribe, maps at http://www.friam.org
________________________________
============================================================
FRIAM Applied Complexity Group listserv
Meets Fridays 9a-11:30 at cafe at St. John's College
lectures, archives, unsubscribe, maps at http://www.friam.org
============================================================
FRIAM Applied Complexity Group listserv
Meets Fridays 9a-11:30 at cafe at St. John's College
lectures, archives, unsubscribe, maps at http://www.friam.org
