GFC: Quality, Quantity, and The Chicken Little Phenomenon
Politics / Social Issues May 30, 2012 - 03:23 AM GMTBy: Submissions
Mark Blair writes: The more complex a system is, the more vulnerable it is to collapse. This article offers insights into the ‘qualities’ and ‘quantities’ of stock-market prediction (which for me is human psychology vis a vis political systems).
Firstly, let’s define ‘quality’ and ‘quantity.’ I always use the example of the corporal punishment of children. The ‘quality’ here is whether a parent may physically punish a child at all – that is, even a smack on the wrist. I suggest that no one, in the back of their mind, thinks a smack on the wrist is abuse – but that‘s not the point. The point is: how does the state protect a child from a stepfather who thinks ‘smacks on the wrist’ should be administered with a chunk of 4” by 2”? Here is the ‘quantity’ – how much punishment (if any) is a reasonable amount? Answer: in order to have legal leverage against violent parents who will interpret the ‘quantity’ of punishment in relation to how many beers they’ve had, none at all: If no ‘quality’ of punishment at all is permitted, then all ‘quantity’ of it is therefore illegal.
Now, patience here, readers: I’ve not forgotten that we are oracle-ising the markets – but now let’s define a ‘chaotic equation’:
2 + 2 = 4. That’s a stable equation.
2 + 2 + a number between 1 and 4 = a number between 5 and 9. This is a less stable equation.
Think about Mr. Smith’s Boot Factory in, say, 1800. The boots were made entirely on the premises. The leather for the boots came from the farm next door, and was delivered in a cart made by the blacksmith in the local village. The ‘equation of boot production’ was stable.
Now consider a single factor that has entered the ‘stock-market equation’ just since I started paying attention – VFTs. You don’t need to have even a thimbleful of knowledge about how they work to comprehend that they are a long-term destabilising factor simply because they add a highly unstable ‘constituent’ to an ‘equation’ that is already unstable.
There are a lot of boomer denizens on this site. Some have followed for decades the career of fiat currencies (and the definition of the word ‘career,’ as in ‘The truck careered off the road,’ is exactly what I’m writing about here . . . ). Some have backgrounds in the arithmetic of the creation and development of pension systems. We can argue the sociological validity of these things another time; but I haven’t forgotten where we are: these things represent ‘quantities’ of a ‘quality,’ that is, the constituent elements of an equation whose instability extrapolates as that equation becomes increasingly complex.
Other ‘unstable constituents’ include the here-and-now-gratification values of the west, climate change (whether it’s us or not . . . ), peak soil, overpopulation – we all know the list is longer than it has ever been, and that the equation now looks something like this:
A number between 1 and 10 multiplied by a number between 2 and 7 plus 3.4 times a percentage that will be announced by an unreliable Government Department next week.
What I’m offering here, readers, is (a) an insight into how the world economy can be, month in month out, on the point of careering out of control at any second, and thereby (b) a fairly simple way of explaining it to those you want to explain it to. The facts are that
the situation is of a complexity that is historically unprecedented,
and that most Ordinary People are blissfully unaware of that,
and that it is our responsibility to explain these complexities to them in an era in which even the President of the United States can hardly get his sound-bite in.
Friends of mine, I know, are weary of me saying, ‘Listen, guys, this is serious!’ If it’s so serious . . . how come nothing much has happened in their world? [I’m in Australia. It’s sure realer in the U.S. and other places.]
So, in conclusion:
a collapse (of some considerable degree) is immanent to a system as complex as ours; and predicting that collapse even to within even a decade – considering that the equation has been ‘building up a head of steam’ for a quarter of a millennium or so – is to achieve 96% accuracy, a remarkable degree of accuracy in predicting the outcome of a chaotic equation. Meanwhile, we know it’s coming – it’s got to come* -- and the longer it takes, the worse it will be. Would it be responsible to not tell clients and friends and family? No. So, we tell them; and thus . . .
we are Chicken Little.
Thank you for your time.
*Some other time, we can consider the problems of self-interest and the forms of True Believerism whereby people like the Eurocrats can’t actually see that it’s coming.
Mark Blair owns neither property nor shares. He has thirty years’ experience in devolutionist politics and political theory, and is studying psychology and genetics to try to understand what makes this species tick. His email is mark.blair@internetsat.com.au
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