"The man who prefers his country before any other duty shows the same spirit as the man who surrenders every right to the state. They both deny that right is superior to authority."
Lord Acton

Tuesday, February 7, 2012

Structured Criticality: The Bigger Picture

Many are concerned that the US is well on it's way to take the road traveled by Germany in the 1930s, and Russia before it into totalitarianism.  Certainly actions taken in the last 10 years give evidence to that trajectory (NDAA, PATRIOT Act, Enemy Expatriation Act, etc).  These issues are grave certainly, and left unchecked could lead to a very bad scenario.  However I think many individuals analyzing these events and planning for potential countermeasures of these acts are missing pieces to the larger picture.  The US and many other modern nations are acceleratingly racing towards structured criticality.  The US government has become too large in it's current form to survive as a top-down hierarchical power where control remains in Washington DC.  The US federal government is approaching structural failure (but the US is not alone). 

(From Wikipedia):
Consider a pile of sand. If you drop one grain of sand on top of this pile every second, the pile will continue to grow in the shape of a cone. The general shape, size, and growth of this cone is fairly easy to model as a function of the rate at which new sand grains are added, the size and shape of the grains, and the number of grains in the pile.
The pile retains its shape because occasionally a new grain of sand will trigger an avalanche which causes some number of grains to slide down the side of the cone into new positions.
These avalanches are chaotic. It is nearly impossible to predict if the next grain of sand will cause an avalanche, where that avalanche will occur on the pile, how many grains of sand will be involved in the event, and so on.
However, the aggregate behavior of avalanches can be modeled statistically with some accuracy. For example, you can reasonably predict the frequency of avalanche events of different sizes.
The avalanches are caused when the impact of a new grain of sand is sufficient to dislodge some group of sand grains. If that group is dislodged then its motion may be sufficient to cause a cascade failure in some neighboring groups, while other groups that are nearby may be strong enough to absorb the energy of the event without being disturbed.
Each group of sand grains can be thought of as a sub-system with its own state, and each sub-system can be made up of other sub-systems, and so on. In this way you can imagine the sand pile as a complex system made up of sub-systems ultimately made up of individual grains of sand (yet another sub-system). Each of these sub-systems are more or less likely to suffer a cascade failure. Those that are likely to fail and reorganize can be said to be in a critical state.
Put another way, the likelihood that any particular sub-system will fail (or experience a particular event) can be called its criticality.
We arrive that the US and other connected powers are approaching this point through qualitative, historical and empirical data. The US has suffered unprecedented regulatory capture by the financial industry and others that historically has always led to a collapse (devaluation or hyperinflation) of the monetary system - This Time is Different - Reinhart and RogoffWillful and systemic accounting control fraud has also become epidemic with essentially zero resistance by any branch of government (Bill Black -The Best Way to Rob a Bank is to Own One)  Also, as governments grow and engineer their environment, they become increasingly fragile and vulnerable to convexity effects (fat tails), all the while their erroneous actions become larger in amplitude.  Put differently, they self destruct (such as the ancient Egyptian empire).  Some of these ideas and more are discussed in Nassim Taleb's "The Black Swan of Cairo" (essential reading).  The US government gas grown to the scale in which it cannot effect control on it's environment; the sand pile is starting to slide.  The net effect is that the next stable state of the environment will be more local control of government (states and municipalities) in combination with more control and influence through self organizing systems (the Internet, real price systems and social media).  Self organizing systems are effectively scale-free. 

 What does structured criticality of western countries (and some eastern countries) have to do with the totalitarian direction of movement by governments?   Put simply, these forces will interactThe trend towards totalitarianism may very likely increase the velocity towards structured criticality and cascade failure.  Similarly, the governments approaching criticality will become less effective totalitarian systems.  However, during the change state things become more fluid, increasing the danger of evil getting temporary control, and also offering powers of good to shape the end-state.  The goal should be to survive the cascade failure and use it to enact positive change.  The message of hope is that totalitarianism is not a stable state, and will be naturally repelled.  If resistance becomes necessary, those forces of resistance will have the wind and other forces of nature at their back.  Totalitarianism, if implemented as policy, will be ephemeral.

There is downside however.  Some governments could fail in a very dangerous way, e.g. starting a nuclear war thereby killing thousands or millions of innocents.  All efforts should be made to prevent this, however most of the people who understand are in no position to sway government policy.  There is an excellent paper discussing a more minor failure (not all failures are to the magnitude which we are facing) here: The Inherent Limits of Organizational Structure and the Unfulfilled Role of Hierarchy: Lessons from a Near-War

There are several potential policy choices remaining.  Just as cannon or charges are placed on a mountain to attempt steering or prematurely and more safely trigger avalanches, it is theoretically possible to trigger the cascade failure prematurely to steer away from a possibly catastrophic policy decision, or trigger the cascade now before it becomes bigger.  The blowback and unintended consequences could be tremendously bad however.  The media and pubic always blame the catalyst for the collapse, not the structural fragility of the system.  A second and potentially more important action is to encourage state and local communities to prepare for a cascade event.  By local communities planning and implementing redundancies, contingencies, monetary substitutes and preparing for a sudden failure at the federal level it will increase the robustness of that community.

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