Thursday, December 9, 2010

Creativity: Individual vs Group

I have tried to show in the last post how the behaviour of a group of individuals can be very different from the behaviour of an individual.

The simple search for food becomes a problem when the group has grown so big that there is starvation at the margin, which then gives the core individuals greater fear of an impending resource scarcity that they begin to accumulate for future consumption which, in a monetised economy, becomes a folly as, instead of accumulation food sources, they accumulate tokens (otherwise called money). Of course, that folly is the result of the evolution of society - the matrix that smart people create for themselves by making use of the trusting ordinary public and in the end get caught in it themselves - where happiness has become from the consumption of food to the consumption of other unnecessaries. The growth of society then becomes dependent on the production of the unnecessaries whose depend is based not on real needs (if I don't it I will die, literally) but on bank credit and what the neighbours have. The layers of the delusion multiply. The limit to that expansion of unnecessaries is the limit of credit expansion, defined when loans default at a rate that the interest margin can cover which is very little especially in a period of near-zero interest rate. The matrix gets into a ponzi-type scheme when more new money is printed to fund old money at a rate which is in excess of the rate of expansion in activities related even to the production of the unnecessaries which may be at a rate of expansion which is unable to absorb new entrants into the labour force.

In a more equitable world, the objective is to create a society where every individual is remunerated at roughly the same rate of pay, and this is found to be a society made up of professionals - where everybody comes up with their own schedules of fees. That schedule is the rate of exchange of different services. For a more egalitarian society, there probably should be an abolition of the discrimination certain types of professions such as toilet cleaning or housekeeping or blog posting. In which case, if everybody is equally good and equally demanded, then with everybody getting the same income, it is unlikely that anybody will be able to afford to pay any other person to do a part of his or her chores without being severely handicapped financially - but then, in that world, there will be no need for that service provider to offer his or her services to his or her neigbour because he or she is not in financial want. In a truly egalitarian world where everybody gets the same income, earned or otherwise, there is no incentive to do anything for others, each will do his or her own chore, and each will eat his or her food in silence alone.

The great interaction in society, and why society evolves in the first place, is inequality - which in economics is called disequilibrium - which in physics is called the potential difference or polarity - where the attempt to achieve an impossible equilibrium (of silence and non-activity) results in incessant activity. In economics, that restless activity is called the Gross Domestic Product or GDP. In modern society, the objective of politicians is to try to increase the rate of incessant activity among the people in order to keep them occupied (for if they are idle, they will march down the streets for change which is always possible), and this is done by creating a greater disequilibrium. The tradition method of creating economic disturbances is to get the minds of individuals to come out of the tranquility of the meditation and god-aligned frame into one of great dissatisfaction so that the intensive activity of the mind leads one to come up with all sorts of weird ideas and this din is the mind is celebrated in modern society as the way to prosperity.

As in nature where the group exists to protect the individuals in the group, in human society the social fabrication through its customs and culture seek to protect the individuals by seeking their conformity. In successful societies, conformity to the social convention is paramount but that success may not be growth of happiness but the continued existence of the old group. In newer societies formed from the dishevel of modern times, usually because of war but sometimes because of famine, the coming together of peoples from different cultures sets a renaissance in the creativity of human existence where the multiple disequilibrium points allow for a great multitude of cross traffic of ideas of how to live and what to do in life, if that traffic is not stopped by bigots who police the thought process of the people. Inevitably, the first and second generations may be still want to cling to their old comfort but we can expect, if left to their own, the young will think anew their taught way of life, and forge new identities with their school friends and neighbours. With it, new levels of existence - which may be away from mechanisation and the modern sciences of despoiling the environment, but the sharing of new understanding of their heritages.

Friday, December 3, 2010

Humans, Environment & Investment

I have taken several minute steps in the last few posts to put humans in proper context, and to show how the many invisible layers have been built up over the millennia as the human specie struggle for survival in this world.

I must say what a woeful lot we humans are! It is the madness of crowds, the whole colossal folk dashing here and there migrating and spread like cancer in search of its own preservation but only find itself painted in the corner. That paint is the deforested environment which becomes uninhabitable to all but sand and a few lizards.

The race out of the garden of eden into the big wide and wild world has set the rate of growth of the human population against (a) the rate of growth of agricultural output and (b) the rate of decline of the forest and wild life. Thomas Malthus was right. The size of human population on earth will be limited by agricultural output ultimately. That limit may be a long stretch away. In the meantime, there is a dynamic interaction between the two: population surge following new discovery of food production which encourages the population to overshoot food supply, adjusted by hunger and disease and famine.

Probably with such a history embedded in our genes, we find ourselves unwittingly living in perpetual fear of inadequate food. This great search for certainty in an uncertain world creates the world and society as we know it to be today. The incessant urge to save and investment in the future that is already here.

In the world of goods, to save is to set aside some portion of the current output for future consumption such as by salting or sugaring or fermentation. That preserved food can actually be eaten tomorrow when it become rainy. There is no waste. When there is overproduction in the current period, and when the preserved food is in huge surplus, the most logical response is to take a break from work, do some maintenance work, and spend the leisure drinking and dancing and telling stories - activities which are collectively called "culture." There is a constant adjustment between output and consumption and saving and investment.

If food is taken out of the forest, the most logical step is to protect and preserve the forest so that it can continue to sustain the community. But we know that a finite forest can only support a finite community because hunger and war break out. At this limit, Malthus is spot on. This means that, at the limit, there is so much preservation of the forest can do for humans. In the meantime, any limit that is felt is determined by technology and human knowledge of how to extract more from less. This can be seen as a fact, and we simply just have to accept it. But even so, the community must protect the food source from selfish greedy individuals who may have no qualms about destroy the food source thinking that he or she can stored it off somewhere purely for his or her own consumption. In nature, any other method of storage apart from leaving nature alone is foolhardy.

This problem of the short-seeing long-sighted selfish person is compounded in a world of tokens (paper or commodity money) where its special quality of not decaying physically (because it's a computer number or a piece of metal) may create the illusion that accumulation of pile of metal or paper or a larger number on a computer is the way to go into the future for generations. All things lie in the present, this accumulation of uneatable assets is being balanced against the liability of persistent destruction of the environment (by chopping down trees or digging up stuff or polluting). This is being gleefully done today by warlords with the collusion of multinational firms and global finance.

At the same time, the overproduction of goods (unsold inventory) or services (unemployed workers) is being happily ignored and misinterpreted - with the later overproduction (unemployment) probably from good agriculture or bad education is being used as a basis for further overproduction (of goods) which floods the world both in terms of huge quantity, low price and bad quality. And central banks continue to churn out the tokens.

In this world of mindless pursuit of economic growth, we are drowned in a sea of useless constructs. The rich becomes very rich and the poor becomes very poor, all within the economic system that we have immersed ourselves. We have to get out.

Wednesday, December 1, 2010

Creating The Economy & Money

I think we have now come to a stage where things may be a bit more familiar to the reader - in that we shall be dealing with issues that are a bit more mundane.

We have now gotten out of ether and universal consciousness and into the world of form, of individual physical entities. As an individual born with a stomach and a sexual reproductive organ, our true calling is to each and to procreate. The sex part is quite intuitive and I shall not be dealing too with that because it has been very well treated by the arts. I shall instead delve into the eating part.

Stage 1. Humans and Environment

In my version of the art of war - of war between humans and non-humans - a person stands alone in this world and ask: What is my next step?

In my little garden of eden, the next human step is to stretch out the hand and it shall be provided by the fruit of the nearest tree for sustenance. But even in paradise, there is need for knowledge, for some have eaten the fruit and lived, and some have eaten the fruit and died. Distinction comes into being - between the fruit that gives life (edible fruit) and the fruit that takes away life (poison). Which this distinction, one can be creative in the identification of food. The community that succeeds in finding the best way to classify food and poison becomes the most thriving one.

At this stage, it is still possible for humans to stay put in the original state and stand naked with outstretched arms and be provided.

Stage 2. Population Growth and Food

Stage 2 is when the population grows and there is pressure on the supply of food. There will come a time when what nature provides in the vicinity is insufficient for the growing population, and the only concern of the human race is food. This is as if the human race has been cast out of the garden of eden. Food is no more a sure thing for the existing population. The option is to fight for the existing supply of food (those who fail die), or to migrate out of the community into the big wide world and hope for the best, or to be find ways of increasing the food supply from the same existing immediate environment. By the way, all these three options call for some degree of creativity - to think out of the box, meaning to think differently from the traditional way of looking at things, as well as doing things and handling things.

Creativity in fighting for food requires the acquisition of power, the art of war and the organisation of slave labour.

Creativity in out migration requires the construction of the means of transportation, communication, organisation of autonomous societies, the saving of scarce resources, the investment in useful knowledge and contraption, the art of living with different cultures.

Creativity in the production of food in existing environment involves conservation of the productivity of the environment, the consumption at necessary levels, the preservation of surplus food for the uncertain future supply or increase in members of the community.

Stage 3. Social Organisation

In moving out of the garden of eden, there is a need for organisation - which in the primary stage will involve sacrifice by members of the cooperative to do committee work and in the secondary stage a group of professional organisers who are paid out of the communual output for them to tell the community what is the best way to organise themselves.

This organisation leads into the problems of how to get that portion of the output to be paid to the non-production team. One method is to fixed the portion in quantity terms, another is to pay according to tokens the quantity of which may be fixed or not, and the number of tokens may or may not match the quantity of output available for exchange. All these issues lead to the problem of the economy concerning production, distribution, consumption and the supply of the money stock and the demand for money, as well as price of output and the interest on money should lending and borrowing be allowed. The very simple problem of organisation of human society in as non-violent way as possible leads to arms-length and informal dealing that are signaled by price (or the number of tokens).

It can be seen that the economic system can be corrupted by the pursuit of the acquisition of tokens as an end in itself (thinking that these are valuable) and if not realising that valuable necessarily means hard-to-get, some token control authority may try to ingratiate himself or herself to the political masters in the guise of trying to smooth the production of output without being blamed for any hardship that must arise with any attempt at adjustment (i.e., getting some people to work or work hard or work harder) and end up printing more tokens and distributing them to the political masters (quantitative easing) so that the political masters may suffer no inconveniences while the general public may have their consumption curtailed as a result of inflation.