Cactus Club July 1999

2 July 1999..................a distorted sense of the world's possibilities

Quoting from CHAOS: Making A New Science by James Gleick---------------------"Within ecology itself, as May saw it, a central controversy in the early 1970's dealt with the nature of population change. Ecologists were divided almost along lines of personality. Some read the message of the world to be orderly: populations are regulated and steady---with exceptions. Others read the opposite message: populations fluctuate erratically---with exceptions. By no coincidence, these opposing camps also divided over the application of hard mathematics to messy biological questions. Those who believed that populations were steady argued that they must be regulated by some deterministic mechanisms. Those who believed that populations were erratic argued that they must be bounced around by unpredictable environmental factors, wiping out whatever deterministic signal might exist. Either deterministic mathematics produced steady behavior, or random external noise produced random behavior. That was the choice.

In the context of that debate, chaos brought an astonishing message: simple deterministic models could produce what looked like random behavior. The behavior actually had an exquisite fine structure, yet any piece of it seemed indistinguishable from noise. The discovery cut through the heart of the controversy._____________

The world would be a better place, May argued, if every young student were given a pocket calculator and encouraged to play with the logistic difference equation. That simple calculation, which he laid out in fine detail in the NATURE article, could counter the distorted sense of the world's possibilities that come from a standard scientific education. It would change the way people thought about everything from the theory of business cycles to the propagation of rumors.

Chaos shoud be taught, he argued. It was time to recognize that the standard education of a scientist gave the wrong impression. No matter how elaborate linear mathematics could get, with its Fourier transforms, its orthogonal functions, its regression techniques, May argued that it inevitably misled scientists about their overwhelmingly nonlinear world. ' The mathematical intuition so developed ill equips the student to confront the bizarrre behaviour exhibited by the simplest of discrete nonlinear systems,' he wrote.

' Not only in research, but also in the everyday world of politics and economics, we would all be better off if more people realized that simple nonlinear systems do not necessarily possess simple dynamical properties.' " Question: What would be the social, political, and economic consequences of a shift in education toward teaching more about chaos theory compared to the current emphasis on the linear relationships of the traditional models? (PD)

6 July 1999....................enforced tunnel vision

Quoting from COMPLEXITY: The Emerging Science At The Edge Of Order And Chaos by M. Mitchell Waldrop----------------" ' The royal road to a Nobel Prize has generally been through the reductionist approach, ' he (George Cowan) says---dissecting the world into the smallest and simplest pieces you can. ' You look for the solution of some more or less idealized set of problems, somewhat divorced from the real world, and constrained sufficiently so that you can find a solution, ' he says. ' And that leads to more and more fragmentation of science. Whereas the real world demands---though I hate the word---a more holistic approach.' Everything affects everything else, and you have to understand that whole web of connections.

Even more distressing was his sense that things were only getting worse for the younger generation of scientists. Judging from what he'd seen of the ones coming through Los Alamos, they were impressively bright and energetic---but conditioned by a culture that was enforcing more and more intellectual fragmentation all the time. Institutionally (as opposed to politically), universities are incredibly conservative places. Young Ph.D's don't dare break the mold. They have to spend the better part of a decade in the desperate pursuit of tenure in an existing department, which means that they had better be doing research that the department's tenure committee will recognize. Otherwise, they're going to hear something like, ' Joe, you've been working hard over there with the biologists. But how does that show you're a leader over here in physics? ' Older researchers, meanwhile, have to spend all their waking hours in the desperate pursuit of grants to pay for their research, which means that they had better tailor their projects to fit into categories that the funding agencies will recognize. Otherwise, they're going to hear something like, ' Joe, this is a great idea---too bad it's not our department,' And everybody has to get papers accepted for publication in established scholarly journals---which are almost invariably going to restrict themselves to papers in a recognized specialty.

After a few years of this, says Cowan, the enforced tunnel vision becomes so instinctive that people don't even notice it anymore. In his experience, the closer any of his Los Alamos researchers were to the academic world, the harder it was to get them to participate in team efforts. ' I've wrestled with it for thiry years, ' he sighs.

As he thought about it, however, he began to feel that the most distressing thing of all was what this fragmentation process had done to science as a whole. The traditional disciplines had become so entrenched and so isolated from one another that they seemed to be strangling themselves. There were rich scientific opportunities everywhere you looked, and too many scientists seemed to be ignoring them.

If you wanted an example, Cowan thought, just look at the kind of opportunities opening up in---well, he didn't really have a good name for it. But if what he'd seen around Los Alamos was any indication, something big was brewing. More and more over the past decade, he'd begun to sense that the old reductionist approaches were reaching a dead end, and that even some of the hard-core physical scientists were getting fed up with mathematical abstractions that ignored the real complexities of the world. They seemed to be half-consciously groping for a new approach---and in the process, he thought, they were cutting across the traditional boundaries in a way they hadn't done in years. Maybe centuries." Questions: Will socionomics ever break through the reductionist tradition in higher education's social science teaching methodology? Should it? (PD)

10 July 1999....................God, attractors, and The Baker's Dozen

Quoting from CHAOS, MANAGEMENT AND ECONOMICS: The Implications of Non-Linear Thinking by David Parker and Ralph Stacey---------------"Planning and similar forms of control, at both the micro-(organisational) and macro-economic levels, are essentially driven by negative feedback. They are intended to produce predictable patterns of behaviour. This then facilitates optimal adaptation of the organisation, market or entire economy to a GIVEN or known environment. In a negative feedback system there are identifiable conditions, or parameter values, within that system which cause it to settle down. It is attracted to a point from which it will move only if there is an external 'shock'. This amounts to attraction to a state of stable equilibrium - a state in which the system does not change or changes only in repetitive and therefore predictable ways. The equilibrium of neo-classical economics is of this type. Such systems may be efficient, in the sense that repetition helps them to do better and better what they already do well. But, by the same token, they cannot do anything innovative or new: they are not creative. Neo-classical economics has a problem introducing novelty and innovation, a point to which we return later. (PD note: Bionomics and Austrian economics helps to correct this deficiency.)

Equilibrium behaviour is an either/or choice. Either the system is driven by negative feedback and tends to stable equilibrium or it is driven by positive feedback and tends to uncontrollable instability. If that instability is to be removed, then some agent or condition outside the system has to ' step in and put a stop to it '. Non-linear feedback systems are not, however, confined to ' either/or ' behaviour. This produces the paradox of stability within instability. When systems are far from equilibrium, they automatically apply INTERNAL constraints to keep instability within boundaries. This is so because of the non-linear structure of the system.

Positive feedback processes amplify and spread disturbances. In the extreme, they could make an organisation, market or economy explosively unstable. From a linear view of the world the instability would be unending. The trajectory would shoot upwards (or downwards) unless disturbed by external intervention. But non-linear systems of a chaotic nature can be highly complex and seemingly unstable. Yet they remain constrained because of the existence of what scientists call a STRANGE ATTRACTOR. (PD note: A strange attractor is an attractor which has multiple points of attraction within a finite space. Where the attractor is strange the system's behaviour becomes unstable but within bounds.)

A normal attractor is the equilibrium or limit time-path of a system. Imagine a ball placed inside a fruit bowl. Shake the bowl and the ball shoots up one side and then back across or around the sides to the other and then back again to the first side. But it eventually settles down to the bottom of the bowl. It is attracted to a stable equilibrium point or what is a fixed-point attractor. A point attractor is a steady state - the system does not evolve or change. The ball always ends up in the bottom of the bowl. The outcome is fully predictable.

By contrast, a clock pendulum is a classic case of a regular, periodic motion which constantly repeats itself (the limit cycle). In this case the system is said to have a periodic attractor. The pendulum swings regularly back and forth, from one point to another, hour after hour. Where behaviour is neither stable nor cyclical but chaotic, however, it is far more complex than in either of these cases. The movement in the system is determined by a ' strange attractor '. Unlike the other two attractors, a strange attractor is associated with complex oscillations (hence its name). It is a set of points, rather than one point, to which movements starting off in the neighbourhood are drawn. The path is aperiodic and never reaches a stable equilibrium. Equally, it does not follow a regular cycle like a pendulum. At the same time it has bounded movement and is not completely unstable. The motions are constained within the region of the attractor.

For any non-linear feedback system there can be points within it to which the system is drawn that do not produce a stable equilibrium point or a regular (periodic) cycle. Instead, the product is far more complex behaviour. The system becomes a mixture of stability and instability. Think of the ball in the fruit bowl moving about within the bowl in what appears to be a random fashion. It is never, however, allowed to leave the bowl and therefore its movement is bounded. Because of the complexity of the movements, for all practical purposes the sytem can seem completely unstable and unpredictable.

Complex behaviour, associated with a strange attractor is to be found at the borders between stability and instability. If a non-linear feedback system is driven from the stable state, it passes through a PHASE TRANSITION - one of the most important discoveries of recent science." (PD note: A phase transition is a sudden qualitative change in a system's behaviour.) Comment: Below is a question received from one of our observers along with my response.

This sounds interesting as does the web-site. However, as a committed Christian and a student of Theology I do have some concern about the bakers dozen of socionomic principles outlined where it is mentioned that God is 'a strange attractor.' What exactly is meant by that? (CS)

In the new science of complexity theory an attractor binds a system to a pattern of behavior. This may be attraction to a stable point, to a regular cycle or to more complex forms of behavior. A strange attractor has multiple points of attraction within a finite space. Where the attractor is strange the system's behavior becomes unstable but within bounds. This is not intended as a comprehensive definition of God but only to indicate that one characteristic of God is to bind human association together in an unpredictable (and therefore not "engineerable") emergent system based on our free will but still within bounds that are beyond our meager powers of comprehension. (PD)

Question: How could we improve on The Baker's Dozen? (PD)

14 July intelligible instrument for the inducement of a spontaneous order

Quoting from "The Results of Human Action but not of Human Design" by F.A. Hayek in AUSTRIAN ECONOMICS: A Reader, edited by Richard M. Ebeling-------------------"But if in the theoretical social sciences these insights appear at last to have firmly established themselves, another branch of knowledge of much greater practical influence, jurisprudence, is still almost wholly unaffected by it. The philosophy dominant in this field, legal positivism, still clings to the essentially anthropomorphic view which regards all rules of justice as the product of deliberate invention or design, and even prides itself to have at last escaped from all influence of the ' metaphysical ' conception of ' natural law ' from the pursuit of which, as we have seen, all theoretical understanding of social phenomena springs. This may be accounted for by the fact that the natural law concept against which modern jurisprudence reacted was the perverted rationalist conception which interpreted the law of nature as the deductive constructions of ' natural reason ' rather than as the undesigned outcome of a process of growth in which the test of what is justice was not anybody's arbitrary will but compatibility with a whole system of inherited but partly inarticulated rules. Yet the fear of contamination by what was regarded as a metaphysical conception has not only driven legal theory into much more unscientific fictions, but these fictions have in effect deprived law of all that connection with justice which made it an intelligible instrument for the inducement of a spontaneous order.

The whole conception, however, that law is only what a legislator has willed and that the existence of law presupposes a previous articulation of the will of a legislator is both factually false and cannot even be consistently put into practice. Law is not only much older than legislation or even an organized state: the whole authority of the legislator and of the state derives from pre-existing conceptions of justice, within a framework of generally recognized but often unarticulated rules of justice. There never has been and there never can be a ' gap-less ' (luckenlos) system of formulated rules. Not only does all made law AIM at justice and NOT CREATE justice, not only has no made law ever succeeded in replacing all the already recognized rules of justice which it presupposes or even succeeded in dispensing with explicit references to such unarticulated conceptions of justice; but the whole process of development, change and interpretation of law would become wholly unintelligible if we closed our eyes to the existence of a framework of such unarticulated rules from which the articulated law receives its meaning. The whole of the positivist conception of law derives from that factually untrue anthropomorphic interpretation of grown institutions as the product of design which we owe to constructivist rationalism.

The most serious effect of the dominance of that view has been that it leads necessarily to the destruction of all belief in a justice which can be found and not merely decreed by the will of a legislator. If law is wholly the product of deliberate design, whatever the designer decrees to be law is just by definition and unjust law becomes a contradiction in terms. The will of the duly authorized legislator is then wholly unfettered and guided solely by his concrete interests. As the most consistent representative of contemporary legal positivism has put it, ' From the point of view of rational cognition, there are only interests of human beings and hence conflicts of interests. The solution of these conflicts can be brought about either by satisfying one interest at the expense of another, or by a compromise between the conflicting interests. '

All that is proved by this argument, however, is that the approach of rationalist constructivism cannot arrive at any criterion of justice. If we realize that law is never wholly the product of design but is judged and tested within a framework of rules of justice which nobody has invented and which guided people's thinking and actions even before those rules were ever expressed in words, we obtain, though not a positive, yet still a negative criterion of justice which enables us, by progressively eliminating all rules which are incompatible with the rest of the system, gradually to approach (though perhaps never to reach) absolute justice. This means that those who endeavored to discover something ' naturally ' (i.e., undesignedly) given were nearer the truth and therefore more ' scientific ' than those who insisted that all law had been set ( ' posited ' ) by the deliberate will of men. The task of applying the insight of social theory to the understanding of law has, however, yet to be accomplished, after a century of the dominance of positivism has almost entirely obliterated what had already been accomplished in this direction." Questions: What is jurisprudence? By what criteria can we evaluate the quality of a particular law? What are the greatest achievements (if any) in jurisprudence during the 20th century? What is the relationship between socionomics and jurisprudence? (PD)

20 July 1999.......................the evolutionary nature of economic change

Quoting from BIONOMICS: Economy as Ecosystem by Michael Rothschild---------------------"The punctuated equilibrium of unexpected, erratic change across an immense variety of technologies is terribly frustrating for those who want to plan and control the economy. The intrinsic unpredictability of technological evolution makes a mockery of every effort to plan the future. Just as random events reshape the natural environment and cause genetic mutations that set off bursts of speciation, serendipitous discoveries launch new industries. Most recently, the world's physicists were flabbergasted by the discovery of superconductive ceramics that have almost no electrical resistance at near-normal temperatures. The rush to exploit this stunning breakthrough has just begun. Which economist can predict with certainty how the economy and society will be reshaped by this amazing new knowledge.

The plain facts of daily economic life weigh heavily on the worn-out nineteenth-century economic ideologies that undergird the politics of both the Left and the Right. Even diehard Marxists now admit that what Marx wrote might not be applicable to modern economies. Similarly, many Western economists acknowledge that they have precious little to say about the role of technology in economic change. And while a few recent academic works have explored the similarities between biological evolution and economic change, for now, at least, orthodox Newtonian economics still reigns supreme.

And yet, the sensational political changes now underway around the globe reveal the immutable power of economic forces that classical thinking cannot explain. After decades of bitter experience, the world's socialist countries have discovered that when people are denied the opportunity to satisfy their self-interest, the natural processes of technical advance collapse. Reluctantly, the leaders of these nations have come to realize that only by dismantling the bureaucratic superstructure of state planning will there be any hope of revitalizing their moribund economies. None of them realize it, but, by moving to capitalism these countries are unshackling the natural phenomena of economic evolution.

A less dramatic, though related process of economic liberalization has been changing the face of Western Europe. For most of the cold-war era, these nations relied on the nationalization of key industries and strict regulation to control their economies. But, plaqued by technological stagnation and persistent unemployment, the allure of conscious economic planning gradually faded. For the last decade, from Great Britain to Italy, governments have been selling off state-owned firms and relaxing regulations.

In the Third World, nations that gained their independence in the 1950s and 1960s--before the results of the cold war's ' capitalist vs. socialist ' economic experiment were in--are realizing that sovereignty and socialism are not synonymous. Third World leaders have watched attentively as Japan, South Korea, Taiwan, Hong Kong, Singapore, and other once desperately poor nations have risen to world prominence. By now, with the collapse of Soviet and Eastern European economies, everyone knows that capitalism works better. But because the evolutionary nature of economic change is not yet recognized, no one can convincingly explain WHY.

Unless the spontaneous, unpredictable character of evolutionary economic change is understood, there is a strong possibility that many of today's economic reforms ultimately will be undone. Needless policy errors will trigger polictical backlashes and demands for a return to the ' good old days ' of heavy-handed government control.. Should this happen, real human beings will lose the opportunity to improve their lives and their communities. Avoiding such pitfalls demands a full appreciation of the organic nature of the human economy." Question: Does Austrian economics provide a better context for explaining the organic nature of the human economy than neo-classical economics? (PD)

22 July 1999...................orderly anarchy

Here is a paper by Karen Vaughn, one of our Cactus Club members, which deals with Hayek and the theory of complex adaptive systems. In addition to being an excellent topic for TCC Dialogue, it will also be required reading in our internet Principles of Socionomics course. Click here. Question: Is a complex adaptive system an example of orderly anarchy? (PD)

25 July 1999...........................democracy is not the same as political freedom

Quoting from TOWARDS A FREE SOCIETY: An Introduction to Markets and the Political System by Cactus Club member Gary Wolfram--------------------"In a democracy the majority of persons decide what a law is. However, this does not mean that any particular law is just simply because a majority of people voted for it. Democracy is a means of determining what the law is, not a justification for a law having been made. As an example, suppose there are ten of us living on an island. We decide that our society will be run in a democratic fashion. I propose a law that the six of us who are males may enslave the four of us who are females. The six males then vote yes and the four females vote no, and thus the law passes. Are there many of us who would think such a law was just? Yet it was made in a democratic fashion. It is interesting to recall that Adolph Hitler received more than 80% of the popular vote in Germany.

Often we are lead to believe that democracy is equivalent to freedom. Clearly it is not. Yet the media has harped on the question of whether the former Eastern European countries are now democratic using ' democratic ' as a synonym for ' free '. These societies will be free when the laws that are established protect individuals from coercion, whether that coercion be by a single individual acting alone, or by a group of individuals using the power of government by majority rule.

The key to a free society is how to limit the power of temporary majorities. This can be done by establsihing a long-term principle to which the members of society agree. Hayek says that a group becomes a society, not by giving itself laws, but by obeying the same rules of conduct. This is consistent with Bastiat's position that morality is necessary for a just system of laws. If there is no general consensus about a law, or a least the reasoning behind a law, then that law will be impossible to enforce. Anyone who has read about the era of Prohibition and the Volstead Act in the United States can recognize that Bastiat was right.______________

Democracy is also more likely than other forms of government to promote liberty. Although the majority can still coerce the minority, there must be an opinion formed among a reasonably large percentage of the populace to allow that coercion to occur. A dictatorship places the government's monopoly power of coercion in one person. There may be periods when this person opposes coercion, but there may be other persons who become dictators who do believe in coercion. The incentives for this type of person to seek the dictatorship are strong, and thus the history of dictatorships has not been one of individual liberty." Questions: Is individual liberty an evolutionary stable state with monarchy, dictatorship, and democracy only preparatory stages along the way? Is politics, as Pope said, ' the madness of the masses for the gain of the few ' or can politicians produce social welfare in exchange for their tax-based salaries? Is tax theft or the price of civilization? Comment: Once again Professor Wolfram leads us from the topic of spontaneous social order to the topic of harmonious social order. We pause to note that although spontaneous implies natural, natural does not necessarily imply good. A tornado is natural but few would argue that it is good. The point of natural is that it sets boundaries on what can be obtained but those boundaries are subject to change as we find better ways to organize our economic and other social activities. (PD)