Topic: Economic Devastation - page 93. (Read 504813 times)

Not really making any statement with this, but I ran into it not too long ago and found it nice to ponder.

High entropy is not fruitful, humans realized that and formed societies with rules. You should aim at enough entropy to have coverage but also commitment, just like life

Entropy producing structures are stable as long as the production rate is above the rate of their environment, thats fine in an open system. But a problem in a closed system cause eventualy those structures dominate the entropy production in the system. So the crux is not free market/colectivism but are we reaching the limits of the system or will a breakthrough push them further? There lies belief. Reality simply dictates that when you stop growing you start dying.
So i ask do you see a breakthrough before we reach the walls of the system? Of course not, breakthroughs cannot be forseen, hence all the doomsaying, but life, intelligence, societies, cyberspace are a string of breakthroughs so I remain optimistic that one more is expected.

CoinCube, I can't fathom how the mathematical point flew right over your head.   I give up. The balance is precisely high entropy. Collectivism doesn't have it.

aminorex, you lack logic skills despite your apparently impressive math and other skills. I have noticed this on numerous occasions, but this can be because your mental focus is in other areas at the moment. That debt-based money enslaves holders says nothing about causality. That you think a single virtual currency could be destroyed says nothing about the entropy of the market place and the number of altcoins ready to jump into its place. You completely sidestepped the actual generative essence by presenting strawmen that contained no applicable logic. I stopped reading there. Nevermind. Thanks for the upthread help.

My exceptional logic skills are what makes me a very highly capable programmer. Programming is much more about a state machine of logical possibilities, than other types of intellectual disciplines.

There are more productive activities I could be doing than this.

These issues are in different frames, and not directly related.  It's not really debatable that debt-based money enslaves the holders to the issuers, nor that an annihilable virtualized currency can go to zero much more readily, by write-off, than a material, immutable supply, which must always go somewhere, and can never decrease in supply by ordinary means.



I think the conflation is in my expression and consequently in the mind of the reader, rather than in my own mind.  I used the scare quotes because this is a very different notion of "leverage" than contract leverage.  Not all degrees of freedom lend themselves to constructive application.



I understand and agree with your statement, yet continue to hold my position, and without a trace of dissonance:  I was talking about the constructive basis of the money supply, which is irrelevant to leverage futures.

That is because the two scenarios at their extremes are both ones of mass death and extinction. It is only in balance that we find optimal outcomes. If technology advances to the point where a single individual acting alone possess the ability to destroy the entire biosphere then you are correct it will become necessary to track everything everyone does.

At that point we would need to be very very creative and develop solutions that prevent that observation from turning into an Orwellian nightmare. Perhaps the state could be fractured  into small groups of 100 or so people where only those individuals could observe each other and sharing that information with anyone else made strictly illegal except under prespecified and extreme situations? I don't know. It remains a very difficult problem for the future.

I agree that unrestrained anarchism could possibly avoid extinction via self defense technology. It would imply a transition of humanity to a viral reproduction strategy with dormant periods when we lived in small groups underground and on colony ships in transit between the stars and growth periods where we settled a new world or repopulate it after radiation levels subsided only to repeat the process. I find that future unappealing.

We have once again come full circle and return to our original divergence from well over a year ago.


Like I said earlier we are to some degree natural ideological opponents. Perhaps this is due to our division along the FP vs TJ axis?  

If we somehow could achieve the goal we both share and enact a government that was stable and intent on constantly shrinking itself there would likely be two opposing political parties.

The anarchist party would constantly be pushing the latest decentralized solution arguing for rapid dissolution of state functions. The collectivist party would constantly call for restraint and more study worrying over the unknown consequences of untested solutions. Balance would be achieved in the interplay between the parties. We would diverge in that hypothetical world just as we do here today.

Large scale collectivism is insane because low entropy systems have systemic collapse risk in the vicinity of 0.

Whereas the free market has a much higher entropy and thus systemic collapse risk is very low (thanks aminorex for reminding me of that). Taleb has been explaining this in his reknowned books, e.g. Antifragility. Are you collectivists asleep and blind? Read.

Large scale collectivism has another horrific moral and ethical flaw that the free market doesn't have, with horrific systemic risk implications. Specifically it enables individuals to transfer their responsibility to the State and obfuscate their individual irresponsibility.

Sorry CoinCube, for as long as you do not rescind your "anonymity is repulsive" and do not admit the abominable, asymmetric difference in systemic risk between large government and free markets, then we can't possibly function together in society. You obfuscate (to yourself!) that you want to kill me, so how can I live peacefully with you then.

Come on, you have a university degree in math. Don't let it fail you now. Be erudite and objective please.

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Explanation of Entropy

Entropy = Sum(p_i × log(p_i)), where p_i = probability of event i

That equation says a more uniformly distributed occurrence of events has a higher entropy; whereas, concentration of high probabilities for certain events has a lower entropy. At the extreme low a single possible event has a probability of 1 and thus an entropy of 0.

So a system where everything is controlled by a single top-down authority has only one possible set of outcomes (those favored by that single-minded authority) and thus it has an entropy of 0.

We can view entropy as the information content of the system. Thus systems with many autonomous actors with no one actor having a great majority of the possible outcomes in the system, have a much higher information content, i.e. they are smarter, more resilient, and more Antifragile.

The only way the State could stop individuals from acquiring and using such technology would be to track everything everyone does. Choke points of yore only (e.g. export restrictions on certain technology) worked before the internet. The cat is already out of the box and the only way to put it back in, is to track everything everyone does. That Orwellian State would mean certain extinction of the human race because centralization of power corrupts absolutely and there will be no way to break out of it until hits 0 (i.e. cancer entirely killed the host).

The logic you expressed appears to me to be certifiably insane because...

All you have provided are the choice between two scenarios which are both human extinction paths.

My gosh. Sociopath much? Why not contemplate a more rosy possibility?

Of course anarchy (a.k.a. the free market) would never end up with the outcome you illogically fear. Because (unlike a perfectly centralized system which has 0 entropy), the entropy of the free market is higher (not 0) and thus it has a higher implied equilibrium state (above 0).

Can't you PERCEIVE (i.e. envision) that the free market will always react by providing self-defense technology? For example, technology to leave planet Earth if necessary, technology to live underground, and remote sensing (this exists already) technology sniff out certain chemical compositions in a certain proximity. Etc, etc, etc.

This perfectly exemplifies why those who lack PERCEPTION and are too much JUDGING, will prefer insane (absurd) low entropy choices.

We appear to be in significant agreement on the above.

My next post will get into the meat of where we still have incongruence or misunderstanding.

Tada!

http://armstrongeconomics.com/2015/04/12/questioning-cycles/

http://blog.mpettis.com/2015/02/when-do-we-decide-that-europe-must-restructure-much-of-its-debt/#comment-123414

http://blog.mpettis.com/2015/04/will-the-aiib-one-day-matter/#comment-123478

On leverage: It has benefits and drawbacks.  The beneficiaries tend to advance it, while the victims denounce it.  I see two dominant reasons why leverage should not be categorically condemned:  Firstly, any power great enough to impose limits on leverage globally would be a far worse source of systemic instability than the leverage it regulates.  Secondly, where there is advantage to be had from a feature of beneficial contract, regulation is doomed to failure, in as much as work-arounds with the same effects seem always to be found.  That can't be surprising:  As ecosystems become overgrown, mature, every last source of energy for growth is hunted down and extracted.  The competitive pressure to do this continues until final resource exhaustion, every time.  (Co-evolving species does not help really.  It just means the overgrowth and exhaustion occurs quasi-periodically or chaotically.  It is only in the infinite limit that the unboundedness of entropy can rescue the system with p -> 1, and then always by reforging it in a new, perhaps higher-, perhaps lower- dimensional, frame - even one which redefines energy itself.  This kind of chaotic evolution is a necessary consequence of what we signify as "life" and "mind".  Until the substance underlying those notions changes radically, it will persist in some form.)

Some might find an endless regulatory game of whack-a-mole to be entertaining.  But again, the process of generating endless rules which are actually impossible to follow and end up constraining unintended persons in unintended ways, strangling the creativity of innovation and bloating the bureaucracy, increasing taxation and decreasing economic efficiency, promoting corruption and making a mockery of the cohesive ideologies of society  will ultimately be more destabilizing that a few financial failures of whatever size a transparent market would tolerate forming.

You can do fully collateralized futures.  They are certainly less useful, and don't even reduce systemic risk relative to a market-based system of bonding with re-insurance guarantees, so I don't think many would find the case for their requirement to be compelling.  Since I have a horse in the race, I would be de-motivated to bolster the case.  Hedging reduces risk, and depends on leverage in practice, but could also be done fully-collateralized.  I suppose that detractors of such applications of leverage consider that reducing the profits of rentiers is reward in itself.  I don't, but I do think that socializing the downside of risk is a form of corruption and demonstrates the subversion of law.

It is important to understand that the deflationary limit of debt-based monetary systems is essentially zero - unlike, for example, a commodity system such as gold or bitcoin, where no matter what happens to prices, there is at least a semi-stable money supply, in a debt-based system, defaults destroy the money supply.  Right now we are seeing vast quantities of money rush into inflating asset bubbles.  A cascade of defaults when those bubbles pop could destroy the bulk of the global notional money supply.  Even if central banks were to make up such losses by re-inflation, the sheer dislocative stress of the cycle would insure dramatic social instability which those banks are unlikely to survive, as constituted today.

I think that "levered" debt-based money supplies are a very bad idea, in part because they increase the magnitude of collapses, and in part because they are used to enslave the vulnerable majority.  I think they are a very new thing, at this scale, not yet 50 years old, and their collapse will serve a much-needed didactic purpose (very soon):  It will make humanity as a whole intensely averse to such systems, such abuses, much as the Weimar inflation steeled Germany against inflationary policy impulses for 100 years.  The species may never revisit that system again.  Maybe, the worst thing that could happen would be an engineered soft-landing.  (Even if that were possible now, though, the likelihood is that it would eventually fail on an even grander scale.  Economic and social capital are not the whole story:  Fuel and food are also subject to supply shocks during the next 20 years.)

I won't address fractional-reserve free banking, because I have enough indirect exposure to money-center banking to understand how little I know.  It's not what happens today on the local scale, where banks are fee-for-service operators and loan broker-dealers overwhelmingly.  Rehypothecation spirals certainly exist, and no one can say they aren't destabilizing and expect to be taken seriously, but they are denizens of a dense jungle, and move about at night, so I think very few people not native to that jungle can even identify them by sight.  I certainly doubt that any academic economists have more than superficial understanding of these species.  They go extinct rapidly, but are cross-bred and cultivated into new species no less rapidly, so that few but their creators ever understand them.  I am far too ignorant of commercial banking to say what effect it may have on systemic leverage.

In line with your asteroid example above unrestrained anarchy can lead to megadeath in other ways. As we proceed into the knowledge age the resources required to develop and deploy nuclear, chemical, and biological attacks will continue to decline. At some point it may be possible for a single individual to possess the destructive potential our nation states have today. Human nature requires us to develop and enforce significant controls around such technology. Terrorism is a currently a bogeyman used to further state control. That may not always be the case.    


The reason for our partial divergence is that a descent into anarchy especially uncontrolled anarchy will result guaranteed egregious individual losses. The losses from the systemic collapse of socialism while definitively worse remain theoretical until actualized. Hence there exists a potential window of opportunity to act and develop a solution that avoids the guaranteed losses while preventing the unactualized ones.

You point out that all historic instances of involuntary collectivism have eventually devolved to a horrible end game to which I reply that never in history have we had the technology, awareness, and education they we do today. At the very least we have a better chance of solving the problem than prior civilizations did.

The reason I supported I3552 was not because of his proposal which is skeletal and not flushed out. Indeed in my only comments on his actual proposal I mentioned several several significant potential problems. What interested me about I3552's writings was his eventual goal for government.

https://bitcointalksearch.org/topic/m.10810137

I3552's goal is to ultimately to reform the government. It is the same goal Armstrong pushes when he argues for education. I fully acknowledge the prospects for success do not look at all promising at this juncture. Indeed, our society may not be advanced enough to break out of this cycle. We cannot stop the bursting of the global asset bubble. A backlash and wave of confiscation is also inevitable. Perhaps there is some small chance that this event in conjunction with the rise of cryptocurrency will allow us to wake up the masses and convince them to climb out of the petri dish rather then consume themselves in a orgy of self destruction. I acknowledge that it is a long shot, but at least we have a much better chance than the Romans did.
 
You are not wrong in your views and I understand your point. Our dispute centers around what may be possible rather than what is now. The work you and others doing on anonymous cryptocurrency is very important for it is an insurance policy to protect the individual in the event I3552, myself, and people like us fail.  


You have done a tremendous amount to enlighten the people already. You should act to protect you and yours I would not want it any other way.  
  

TPTB we appear to be converging towards consensus once more. We usually always do eventually which is somewhat interesting given that our often dramatically different starting positions.
From the logic above you can see why I reach the conclusions I do mainly.  


and

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Sí Señor TPTB, I am married (in fact our only daughter marries soon).  So as you suggest, no, I would not be interested in a "Filipinas R Us" website.  

And, correct, I would not want to cause or be a part of any sleazy DDoS or similar.

5000 lines of code is a lot to keep track of for one man.  I have enough problems writing SQL (the only thing I am even half-assed in).

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I did see along "Armstrong Way" at some point words to the effect of: "don't worry about the way things should be, instead look at what is."

It's interesting how men whose opinions I respect (in philosophy and religion) say the same.

OROBTC, the site I launched today has nothing to do with the things we are discussing, it has no use to you (you are already married correct?), and the last thing I need (at this early juncture) is haters DDoS attacking my harmless site because they resent my views here.

The only benefit for you would be to get a sample of my capabilities, but it isn't worth the risk to me to share it publicly here now.

The source code of what I launched today is 250 kB, i.e. roughly 5000 lines of JavaScript, PHP, MySQL, HTML, and Apache code.  That is decent sized project for one man to code as a starting point. It is a rehash of a project I had coded in 2010 and shutdown, but I did go over every line of code with a fine tooth comb and rewrote about half the code (all in about a 160 man-hours of actual coding time, I was too sick or wasting time writing in forums with the remainder of that 2 month period). I also wrote a several 1000s of lines of code on other projects in 2014 and early 2015, some of which was some crypto-currency code and the other is an unreleased Android app.

If I ever release work relevant to our discussions here, it will be announced anonymously. You won't know it is me, unless you happen to deduce it based on certain features or my writing style.


I am emphatic on that. Not Armstrong. That is my point.

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CoinCube & TPTB_n_w

As far as I am concerned the recent contributions on this thread do fit the general nature of "Economic Devastation".

CC, I was yanking your chain re Collectivist a couple of pages back...  I think it is ILLEGAL for true Marxists to start internet threads on topics like Economic Devastation.

TPTB, If you now have a business website up, why not post it, and let us take a look?

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While reading through the past 25 or so posts here I encountered the idea, developed a bit, re governments devolving quickly or slowly.  I am not competent to offer a good prediction as to when/how "The System" will collapse, but my inclination is to think it will likely happen fast.  That seems to be the nature of big changes historically.

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Armstrong is emphatic on one idea that I have taken to heart.  Instead of worrying about "what should be", more personal efforts (preparation, education) should be devoted instead to "what actually is".  I have taken to evangelizing less and trying harder to actually SEE and understand what is going on.  And then acting accordingly.

As a personal example, I think that President H. Clinton would likely be bad for the USA.  (Not for the elites though)  But am I trying to do anything about that?  No, unless you count the jokes at her expense I send to my 'Net buddies...  Instead, I am trying to prepare for a host of scenarios, many of them bad, that could shake-out.  In other words, looking our for myself and our lil ol family.

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While I have read some of Denninger, opinions I respect call him a douche.  Or would that be Douchinger?

have you read Dune? If not you will find the notion of the Golden Path intresting

CoinCube, I haven't had much time to think deeply.

My reason to subvert the oversight of government with technology is because without I note power corrupts absolutely and there is no feedback loop that can limit collectivism. The masses don't wake up and change the direction (remember the Petri dish from Understanding Everything Fundamentally which you linked from the opening post of this thread).

Whereas, the free market does limit anarchy such that it doesn't have such devolved, unmitigated disasters. Anarchy can result in egregious individual losses, but it doesn't have the systemic risk of collectivism.

That is my simplest way of proving to you that I am correct.

Does that advance our understanding of our differences?

If you understand what I wrote to be factually correct, then why be repulsed by those egregious individual harm that can come from anarchy? Collectivism also wields egregious individual harm but worse in the form of widespread systemic collapse.

How did we diverge?

I agree there will be a plurality of top-down organizations within anarchy (not just one big collective that swallows everything). But the difference is that the free market is voluntary and competitive and thus the plurality of top-down controllers will never devolve into a single-minded, top-down, systemic catastrophe.

Well there is one exception I can think of where anarchy devolves to systemic collapse. Let's say we know an asteroid is heading for earth, yet no top-down actor in the anarchy has the incentive to act. Then we might need an involuntary collective to act and destroy the asteroid before it impacts the earth. But that is hardly a great argument for keeping collectives around perennially.

Can you think of any other examples that are more compelling in your side?

I am not motivated to stop human trafficking and teenage pregnancy with a global government, because for one reason those are economic activities else they wouldn't exist. They aren't being subsidized by government (and to the extent they are, then reducing government will reduce them which is what you want). When the government destroys what is economic there are kinds of unexpected impacts which are also very harmful to individuals. I provided a detailed post upthread about some of those adverse impacts. I just don't understand why you favor these actions? You say you are a thinking and judging man, so by what evidence? I think if you dig into it, you will end up being converted just as you were on the Global Warming lies.


There can not be gradual decline. It never works that way when such beyond extreme imbalances have been accumulated as we have now in the world.

We only have an option to adapt rapidly which could mitigate some of the collapse. But the masses can not adapt unless they are given some economic reason to, i.e. a pathway from the Petri dish with more food. A crypto-currency could be such an enticingly profitable pathway perhaps (to some extent).

But why get so enamored with I3552's proposal for a currency based on the hodler's reputation value (anonymous with pseudonyms or not, doesn't matter due to Dunbar limit scaling) when we know precisely the problem now is that corruption is peaking, and it can't be just the leaders are corrupt, the people must be corrupt too otherwise they would have kicked the leaders out a long time ago. His proposal would thus just be more of the same. You see the basic fallacy is that organisms in the Petri dish are self-interested thus implicitly want to kill the host. They are gamed by reputation now, and will continue to be.

And you too. Emotionally ("repulsed") you would need to empower a global government to go trample on other cultures because it personally bothers you that anyone (that you don't know and will never meet) would do teenage pregnancy and trade involving humans (a.k.a. human trafficking).