January 3, 2012
From chaos came life, from life reason. Whether to attribute this to God or to Nature challenges philosophers to no end but isn't it ironical how little consideration Man gives to the third leg of the journey. From reason comes chaos.
This seems a paradox. Chaos may be humanly unpredictable and uncontrollable but aren't its characteristic qualities purely negative? Will not, given enough time and resources, science and technology illuminate its darkness? Far from creating it, doesn't reason dissipate chaos?
Read Gillian Tett for an excellent counter-example (*). "To this day, nobody has fully explained what really happened on May 6 ", a "flash crash" during which for instance the US markets briefly valued Accenture at a penny a share (1). The next dive driven by computers, the very embodiment of logic, may be fatal, she rightly fears. And so she seconds the solution proposed by two information technology specialists, Dave Cliff and Linda Northrop", i.e. to "create a cross-border computing center that is capable of extremely advanced, large-scale financial simulation" (2).
Yet, even if it were adopted, this reasonable suggestion would not work without taking other measures which would make the whole idea moot.
There is no mystery. By definition, one can only predict the behavior of a chaotic system in hindsight. True, modeling its original complexity helps foresight. The more powerful the computer, the better the weather forecast. But current security markets are not like the weather.
Weather modelers themselves are recruited as rain makers and reflexivity gets in the way. Thus regulators' simulations would always lag behind the real thing. A robust solution is just the opposite. From existing mechanisms, derive and impose a ceiling on market performance to enable control.
A very long shot? Certainly. A deadly blow to innovation? Not at all. Doesn't Formula One (3) keep competition alive under strict rules? Formula One however is hardly a model of harmony nor of democracy. How can one hope then for the adoption of public interest measures?
In a column on nuclear energy (**), the Lex gives us the opportunity to grapple this important form of solidarity, an ingredient as indispensable to fuel society's economic engine as it is underappreciated. What power plants serve the public interest the best, nuclear or coal-fired?
In principle, one should choose the plant which minimizes the costs to society. In practice, one finds oneself bedeviled with two common issues. How to account for all costs and how to ensure the benefits flow to those who bear these costs.
I am not competent to answer my original question. What strikes me is the superiority of coal-fired plants in pleasing the public. They shift away most of their costs upstream, onto miners paid to risk their lives, from accidents to "respiratory and related illnesses", and downstream, whether onto distant populations under today's global pollution or unborn generations under the Russian roulette of tomorrow's "global warming".
On the contrary a nuclear power plant unloads most costs on its vicinity and concentrates them in rare but catastrophic and directly attributable events, like the Fukushima disaster. Adding to this, the effects of a disaster on the population concerned are as deadly long term as they are quite invisible and largely unpredictable short term. Russian roulette is not so easily shrugged off when self-aware players are the ones who cast the votes.
Some will rather dismiss the whole question as irrelevant. There is no such thing as the public interest, they claim. Yet can capitalism at its best, the unbounded spirit of enterprise, adequately arbitrate between different energy sources? Hardly suspect of anticapitalist fervor, the Lex does mention the possibility of "further technological breakthroughs" in "clean non nuclear energy", but meanwhile opines that "nuclear power is here to stay" in view of its intrinsic strengths. When Germany chose to close its nuclear plants, it only did it in the name of the common good.
Cynics may rename it political expediency. Again I let you be the judge. My point is that there is no more urgent need today than to better understand and promote social solidarity lest we slowly sink into some nightmarish future, evolving into global serfdom or worse.
Solidarity comes from membership in a shared association which, in sedentary societies, means being settled within some borders. This dependency on location is behind three perennial issues, to give human content to geography, this barest of "identity", deal with non location-based organizations, scale up in the presence of neighbors. While the European Union presents an examplary answer to the last one, it struggles to address the first two.
Solidarity requires contributions from all members. Over the long term the existence of the United States is threatened by the way some vocal US citizens hold the very principle of federal taxes and regulations so publicly in contempt and consider solidarity to be paying sloth a salary.
There cannot be contributions without redistribution. Unfortunately it is often justified by society as needed to compensate poor victims, when it ought to recognize proud members. The latter have duties and share responsibilities, while the former have rights and expect entitlements.
There should be no contribution without representation. There again it is a grave error to let this democratic principle be corrupted by the pronaocratic practice of vote buying. For as soon as moneyed interests come to adulterate social solidarity, it eliminates this essential ingredient from the mixture which powers society. As necessary as pure anglo-saxon capitalism has proven itself to be, it is definitely not sufficient.
To see pronaocracy in action, look up David Carr on "SOPA, which stands for Stop Online Piracy Act", under discussion by the US Congress (***). Even if badly needed to properly protect digital property, good laws are a challenge to write. That SOPA has flaws, well explained by David Carr, is not my point today. Ponder instead how "Maplight, a site that researches the influence of money in politics, reported that the 32 sponsors of [SOPA] received four times as much in contributions from the entertainment industry as they did from software and Internet companies".
A culture of plunder does undermine our Information Age and I am against all digital piracy. But I have only scorn for paid for legislation which willfully ignores corporate piracy while it knows no bounds when it comes to stopping individual piracy, besides opposing corporate interests.
Membership, contributions, redistribution, representation. Today's private apathy meets solidarity and public interest. Which way to Tahrir Sq.?
- (*) ..... Flash crash threatens to come back with a vengeance, by Gillian Tett (Financial Times) - Dec 30, 2011
- (**) ... Nuclear energy, by the Lex column (Financial Times) - Dec 30, 2011
- (***) . The Danger Of an Attack On Piracy Online, by David Carr (New York Times) - Jan 2, 2012
- (1) a few ten thousandths of its normal market value
- (2) see The Global Financial Markets: An Ultra-Large-Scale System Perspective, by Dave Cliff and Linda Northrop (Government Office for Science) - 2010
- (3) see Formula One regulations in the wikipedia