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Monday, September 29, 2008

It's not pretty


What drops of wisdom could I possibly add to the torrent of informed discussion currently eroding deep fissures in the media landscape? I think it's the feeling of helplessness that's driving me to want to write something about this "bailout", the "Credit Crunch" and all the rest. Should I go the bullet points in an effort to try to keep it brief? Or should I bother with the longhand of linking through to references of great authority? Why don't I just say first of all: Hitler, Hitler, Hitler, Hitler. Because no matter what, I'm losing this argument (and we all know, at least on the internet, the first person to invoke Hitler in an argument, loses ).

There are so many places I want to take this discussion. I don't know where to start. Firstly, I'd like to take Presidential politics off the table. It too divisive and for that reason boring. Nothing of value resides in what-if'ing either the previous or the present election campaign. Phew, if only it were that easy, to just put the election on hold. OK, that was a low blow at McCain (not to be confused with McGeiver who would have been able to get it fixed in time). But seriously, I admire both Presidential candidates and believe they'd both make fine Presidents (can't say the same for the Rep. VP candidate, but...) I figure, if you make it this far in a US Presidential campaign, you're qualified. That's what the campaign is for, it works, I believe it, so it's now boring.

And everyone has seen G.W. Bush's corporate scorecard; pretty much every company he headed went belly up. So, surely we weren't putting our faith in him to lead the country away from this sort of travail. No, the real Republicans, the real fiscal conservatives and free market capitalists long ago shrugged off any concern they might have had with his record in favor of faith in market. The invisible hand, heck it's "emergent" and that's a hot buzzword right now.

So what level of granularity, what degree of abstraction, what metaphor could be brought to bear on the situation that could sufficiently remove us from the passions of politics? How can this thing even be talked about by people without degrees in economics? And isn't that an interesting question in itself? I mean this "credit crunch" was brought on by human intervention wasn't it? Who knows? It's kinda like climate change, isn't it? I'm hearing lots of voices say lots of different things. Every hand seems to have more than five fingers all pointing in different directions. It's that sort of problem, a quagmire.

So lots of images have been floating around in my head. Today I heard that a fishing boat captain swam 6km to shore to get help for his two deck hands trapped on the sinking boat. They'd been out netting shark, the weather turned foul, the boat was taking on more water than the bilge pump could push out. That's a ripe metaphor. But it's too fraught with drama for what I'm after.

Yesterday I thought the bailout would be like methadone to a junkie. My information on methadone is that it helps the junkie to stop the crave, but brings serious side effects, and isn't a cure in and of itself. I still think this is sort of apt, but doesn't provide much in the way of understanding.

A few days ago I characterized the market/economy as a toddler. It needs a balance of care, understanding, discipline, freedom and opportunity. But it's essentially driven by base motivators and can't be trusted in traffic. Sure, why not. Works, but again doesn't explain much about the future of make any suggestions. It's more useful as a finger-wag at the powers that were supposedly minding the shop.

This morning listening to Radio National, I heard I'm not sure who say: "you can't legislate against greed" , and it struck me that the moral component here is misplaced. And I'm never sure if pundits are using moralistic arguments to drive populist fervor in order to apply some broad pressure, or if they really believe it. But it struck me that she was saying something like: "we don't want to bail out companies that should fail, irresponsible companies that don't deserve to be given new opportunities. The responsible companies that aren't failing should be free to pick their way through the wreckage and profit on into the future." While I like the idea and somewhat agree with it, I think it's missing an essential layer.

Stuart Kauffman wrote a book I like to mention whenever I get the chance "At Home in the Universe" in which he details some dynamics of "fitness landscapes". A fitness landscape is something like all possible solutions for populating a 1x1 square metre of dirt. If you walked out in any given field, staked out a 1x1 square, counted and classified all life in that bit, you'd have a single solution of what's fit to balance that ecosystem. And a deeper look would reveal relationships between those organisms based on attributes and values of the organisms, their relationships, their constraints, etc.. One of the things brought up in Kauffman's work that's always stuck with me is that, say you remove one species of beetle from that 1x1 square. There's no way to predict how the ecosystem will react to rebalance, but it will rebalance given the chance. But more interestingly, there's no way to get the system back to the original state. You can't just re-introduce the beetle. It doesn't work that way.

This is where I'm seeing some value added to the economy discussion. Evolutionary economics is a bit of a buzz-phrase right now, or maybe even a legitimate field of study - who can know which with economics, right? The idea of "let them fail because they were bad" or "the bailout is unfair to those who didn't do wrong" arguments take on a new dimension. The moralistic argument is still pretty clear, the "bad" should "die". But the dispassionate view of the 1x1 square says that if we let one type fail, a new balance will eventually be found. But if we don't let it fail, it's possible we can retain a balance we recognize.

Now, evolution's bread is buttered with failure and success, but being a complex homeostatic system it's highly sensitive at certain thresholds. It could be argued that in order for the "wrong" institutions to be weeded out, and evolution to take place, we need to let them fail. Or it could be argued that just the presence of the smell of these failures is enough to move things along. Remember that the market is all notional, not physical, so should be considered amenable to changes of mind ( which is made obvious with all the talk of "confidence" and "trust" I keep hearing).

So that's my chosen metaphor, a garden patch, or a hillside of old-growth redwoods. The spotted owl is just the canary in the coalmine (that phrase could only make sense to a Northern Californian, but just couldn't resist). If we step back and ask ourselves, given that this particular plot of earth is in a spot of bother, how did that ecosystem work previously? what changed? what do we really want for that landscape now? maybe we can get some answers that aren't so laden with moral judgements and mired in politics.

While it's easy to say "the fishing boat captain should have bought a bigger bilge pump" it's equally easy to say he shouldn't have gone out that day. It's easy to say the junkie should go cold turkey, or shouldn't have started in the first place. When we look at an ecosystem and the instability extinction brings, it's much less easy to say let the "weeds" die. The value that diversity brings to that ecosystem is too great to easily dismiss.

I'm running dangerously close to having to bring Gregory_Bateson's "error of logical type" into this to differentiate between the relationships organizations maintain vs. the organizations themselves. I'll let you follow that rabbit hole where you will. So, with only a tip of the hat to a more rigorous and long-winded defense of my position, I'm not for letting the companies fail. This is far from saying that I'm pro-bailout, or that I think that the proposed bailout will work. I've got no idea about that. I'm only resolved that the greater good would not be served by letting companies fail. That's as far as I've gotten.

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