March 18, 2011

Spontaneous Order

We're now going to take a compact look at a relatively new discipline that started its life as "chaos theory," then became "the theory of complex phenomena" and is also referred to as "emergence," "self-organization studies," "complex systems," -- and is connected to a few other labels. We'll call it "spontaneous order" because that's what it often seems like when we experience it -- and that label has useful historical roots. It spawned the famous Santa Fe Institute and includes "Information Theory," "Games Theory," and implicates such luminaries as Nobel Prize winner Frederick Hayek (Austrian economics), Norbert Weiner (Cybernetics), Claude Shannon (Information Theory), WWII code-breaker Alan Turing, etc. -- and even legendary Bell Labs -- in its pedigree.

--How Smart Are We? by Thomas Sowell [SUCCINCT PRESENTATION OF THE MANY BEING MORE INTELLIGENT THAN THE FEW ELITES]
The SUBTOPICS:
How Spontaneous Order Happens
Information Games
What Controls Spontaneous Order?
The Advantages
Macro-models of "Spontaneous Order"
Markets as Spontaneous Order
The Main Problem with Spontaneous Order
Why "Order" May Seem Spontaneous -- and Be Unpredictable
Spontaneous Order vs. Central Control
The Alternative(s) To Central Control
Where do YOU fit?

Summary


What is "spontaneous order" -- and why are we interested in it? Well, to begin with, it's something "organized" and measurable that happens, quite often unexpectedly, apparently without any central control or central planning of any kind. And it generally baffles us moderns just as acephalous (leaderless) small groups baffled our urban literate ethnologists and anthropologists. That's almost certainly because our acephalous small groups are themselves regularly examples of "spontaneous order" in action!

The problem with "spontaneous order" is in fact, that{, in part due to our modern hierarchical biases,} it's so baffling it's very difficult to explain, understand -- or even beleive in. Perhaps we might begin with the classic example of spontaneous order that baffled the former Soviet Union's Gosplan, the secret branch of the KGB responsible for centrally planning the Soviet economy - - -

Writing of the era just before Mikhail Gorbachev came to power, [Arkady] Schevchenko reported that top Kremlin officials "are simply baffled by the American system. It puzzles them how a complex and little-regulated society can maintain such a high level of production, efficiency, and technological innovation. Many are inclined toward the fantastic notion that there must be a secret control center somewhere in the United States. " -Michael Rothschild, Bionomics; Economy as Ecosystem, (New York: Henry Holt and Company, Inc. 1990), p. 257

So if there isn't a "secret control center," how is the American economic system controlled? The answer is largely, "It's not," at least not in the centralized hierarchical sense we normally envision control. Instead, it's the result of "spontaneous order." Perhaps a look at how things can spontaneously get orderly might clarify things.

How Spontaneous Order Happens

Now this version of how spontaneous order happens is my own concoction, so caveat emptor.

In the case of living things at least, massive parallel trial and error is the basis. What happens is that many many elements individually change or otherwise "try" new and different ways to do things -- Diversity vs. Ruin, remember. Some of these new ways work but as a rule, the majority don't. The new ways that work well -- depending on how much better they work (and if they remain suitable to the changing "external" conditions that made them better) -- propagate and gradually morph into the dominant "old ways." Ways different from the newly established new ways (that, having become established, are now the "old ways") continue to be tried and so "progress" -- or at least "change," happens. And the cycle repeats, "new" ways gradually replacing old. Examples? This is the basis of how microorganisms evolve drug resistance. It's how "evolution" of all kinds occurs.

A key word in the above description is "propagate." The question is, "How do 'new ways' propagate?" The answer is, information. Information about how the "new ways" are done is passed -- and amplified. On the strictly biological level -- as in drug resistant micro-organisms -- the information is passed genetically. That is, the drug resistance information is passed in genes from the successful "parent" to its offspring. We may think of the parent as "broadcasting" those genes. And a successful drug resistant "parent" may have many more than just one "offspring" -- which, in this case, is where the "amplifying" comes in.

Information Games

We might call this an "information game" and suggest that most all of what goes on in the biological world -- including what most all of us humans do most of the time -- qualify as "information games." In most such games, the successful -- or "winning" -- information is amplified and passed around. [1]

The "amplified" part is essential: In the case of genetic propagation to be successful, there have to be relatively more organisms broadcasting the "new ways" -- or each organism broadcasting them more times and/or faster -- than there were before. Because the new ways work better in the context of the external conditions that made them "better," -- and if those conditions don't change too much -- there are more and more "emitters" or "broadcasters" of the new genes (or more prolific broadcasters), which is how they gradually -- or sometimes not so gradually -- take over.

That is, relative success increases the numbers of broadcasts of the new -- in this case, genetic -- information. And since every new broadcaster almost always "broadcasts" more than one offspring, the take-over may become geometric and non-linear -- and thus appear sudden -- rather than gradual. The "geometric and non-linear" part is what {often | usually |normally} produces the "spontaneous" part of "spontaneous order."

It's also important to note that because physical world circumstances not only constantly vary from place to place -- but also change in the same place over time -- a given set of drug resistance genes will not work better for a micro-organism in all places or even in the same place over time. For example, how does a Teromycin resistant "pathogen" fare over time in two hospitals? Hospital A uses teromycin but Hospital B uses penicillin. And later Hospital A changes to erythromycin. Teromycin resistance would not work in Hospital B -- or in Hospital A once it changed to erythromycin.

So drug resistance and other "new ways" are only "better ways" relative to different and changing external circumstances. This constant change and difference from place to place and, over time even in the same place, is why we need diversity and our own change to avoid ruin -- which is what we examined in the previous chapter, Diversity vs. Ruin -- and why "sex," with its "meiotic cell division" induced diversity evolved, remember.

Another important point is that there are other ways besides genes to "broadcast" or pass-on information. That is, not all transmitted and/or amplified information is genetic -- and thus the information itself isn't hardwired. In line with our discussions thus far involving transmitting information, human speech and face-to-face "mind reading" might come to mind. We'll get to that, but first let's start with something simple but historical: slime mold. Quixotically, we can learn quite a lot about "spontaneous order" -- and about the difficulty we "urban literates" have in thinking coherently about spontaneous order -- from slime mold.

We'll begin by looking at slime mold to see what it does -- and how it passes information non-genetically. First, what it does:

The slime mold spends much of its life as thousands of distinct single-celled units, each moving separately from its other comrades. Under the right conditions, those myriad cells will coalesce again into a single, larger organism, which then begins its leisurely crawl across the garden floor, consuming rotting leaves and wood as it moves about. When the environment is less hospitable, the slime mold acts as a single organism; when the weather turns cooler and the mold enjoys a large food supply, "it" becomes a "they." ^^w$-Emergence, The Connected Lives of Ants, Brains, Cities, and Software, By Steven Johnson, Scribner, ISBN: 0-684-86875-X

And how the slime mold does it - - - by passing of non-genetic information - - -

For some time, researchers had understood that slime cells emitted a common substance called acrasin (also known as cyclic AMP), which was somehow involved in the aggregation process. ... the conventional belief had been that slime mold swarms formed at the command of "pacemaker" cells ... In 1962, Harvard's B. M. Shafer showed how the pacemakers could use cyclic AMP as a signal of sorts to rally the troops; the slime mold generals would release the compounds at the appropriate moments, triggering waves of cyclic AMP that washed through the entire community, as each isolated cell relayed the signal to its neighbors. Slime mold aggregation, in effect, was a giant game of Telephone --but only a few elite cells placed the original call. ... But Shafer's theory had one small problem: no one could find the pacemakers.
While all observers agreed that waves of cyclic AMP did indeed flow through the slime mold community before aggregation, all the cells in the community were effectively interchangeable. None of them possessed any distinguishing characteristics that might elevate them to pacemaker status. Shafer's theory had presumed the existence of a cellular monarchy commanding the masses, but as it turned out, all slime mold cells were created equal. -Steven Johnson, ibid.

What Controls Spontaneous Order?

It's noteworthy that despite difficulty in finding "pacemakers," the idea they existed persisted - - -

... For the twenty years that followed the publication of Shafer's original essay, mycologists assumed that the missing pacemaker cells were a sign of insufficient data, or poorly designed experiments: The generals were there somewhere in the mix, the scholars assumed --they just didn't know what their uniforms looked like yet. -Steven Johnson, ibid.

Does this reveal another hierarchical bias amongst yet another group of urban literate scholars?

But then researcher Evelyn Fox Keller along with Lee Segel found a different non-hierarchical explanation for slime mold aggregation based on a paper by legendary WWII code breaker Alan Turing.

Turing's work on morphogenesis had sketched out a mathematical model wherein simple agents following simple rules could generate amazingly complex structures; perhaps the aggregations of slime mold cells were a real-world example of that behavior ... And so Keller started to think: What if Shafer had it wrong all along? What if the community of slime mold cells were organizing themselves? What if there were no pacemakers? ... Keller and Segel's hunch paid off dramatically. ... the two scratched out a series of equations using pen and paper, equations that demonstrated how slime cells could trigger aggregation without following a leader, simply by altering the amount of cyclic AMP they released individually, then following trails of the pheromone that they encountered as they wandered through their environment. ... If each solo cell was simply releasing cyclic AMP based on its own local assessment of the general conditions, Keller and Segel argued in a paper published in 1969, then the larger slime mold community might well be able to aggregate based on global changes in the environment --all without a pacemaker cell calling the shots. -Steven Johnson, ibid.

The reaction of the "urban literate" scientific community to the Keller-Segel hypothesis is quite revealing, especially in light of the similar reaction by the Kremlin officials baffled by the U.S. economy --- and our experiences of trying to understand how our "acephalous" ancestral groups got things done - - -

"The response was very interesting," Keller says now. "For anyone who understood applied mathematics, or had any experience in fluid dynamics, this was old hat to them. But to biologists, it didn't make any sense. I would give seminars to biologists, and they'd say, 'So? Where's the founder cell? Where's the pacemaker?' It didn't provide any satisfaction to them whatsoever." Indeed, the pacemaker hypothesis would continue as the reigning model for another decade, until a series of experiments convincingly proved that the slime mold cells were organizing from below. "It amazes me how difficult it is for people to think in terms of collective phenomenon," Keller says today. -Steven Johnson, ibid.

Does this perhaps remind you a bit of our ethnologists, anthropologists, etc. vainly looking for hierarchical leaders in our small-group egalitarian societies? Well, it probably should!

Ant colonies operate similarly to the slime mold, the ants following which ever other ants signal success at food gathering with the pheromone trails they leave behind. That's why wiping an ant infested area with vinegar sometimes controls an infestation -- the vinegar destroys their pheromone trails. Steven Johnson and ^^w$ "Emergence" is again the source. And, it's very telling that we "urban literates" see hierarchy -- and central control -- behind every door -- and how hard we must struggle to escape the notion - - -

But despite the Secret service-like behavior, and the regal nomenclature, there's nothing hierarchical about the way an ant colony does its thinking. "Although queen is a term that reminds us of human political systems," [Deborah] Gordon explains, "the queen is not an authority figure. ...She does not decide which worker does what. ...It would be physically impossible for the queen to direct every worker's decision about which task to perform and when." The harvester ants that carry the queen off to her escape hatch do so not because they've been ordered to by their leader; ...the matriarch doesn't train her servants to protect her...
Popular culture trades in Stalinist ant sterotypes--witness the authoritarian colony regime in the animated film Antz--but in fact, colonies are the exact opposite of command economies. While they are capable of remarkably coordinated feats of task allocation, there are no Five-Year Plans in the ant kingdom. The colonies that Gordon studies display some of nature's most mesmerizing decentralized behavior: intelligence and personality and learning that emerges from the bottom up. -Steven Johnson, ibid., pg. 32 [BOLDING emphasis added -lrw]

Those hierarchist models and assumptions certainly are ubiquitous!

And wrong.

Remember "The Fallacy of the Chief," for example.

We can firm-up at least two conclusions. First, spontaneous order isn't necessarily dependent on genetic information alone. It can also occur when non-genetic information -- usually about conditions local to each organism -- is passed around, transmitted somehow (in the case of slime mold, by cyclic AMP, with the ants, it's their pheromones, and with humans, it could be TV and cellphones) -- and other individual organisms make use of it.

Second, processes which lead to "spontaneous order" aren't centrally controlled. Quite the contrary. If they can be said to be controlled at all, it would have to be said that those spontaneous order producing processes -- at least those originating from living things -- invariably seem to be "controlled" by "distributed decisions" based on "distributed information." Which of course strongly implies co-Operation. That is, so-called "spontaneous order," at least the kind produced by living things, is produced by distributed decisions based on distributed information, in other words, by "co-operation."

The Advantages

Slime mold cells signal with cyclic AMP that "there is food here!" Other slime-mold cells heed the call and aggregate -- which means more slime mold cells "eat" and so are more likely to survive. Since as a group they are covering a wider range of territory that way, the cells all benefit by getting food from a far wider area than could individual slime mold cells on their own. That is, through massive "geographical" parallel trial-and-error -- and sharing (transmitting) the informational results (aggregating on the positive results) -- slime mold groups survive better than they could on their own. Ditto ants.

Now remember the following from Robert Axelrod in Chapter 15, How They Got Things Done: "An interesting set of environmental challenges are provided by the fact that many of the benefits sought by living things such as people are disproportionately available to cooperating groups." Such groups co-Operate, first of all, by sharing information.

Can you think of an explanation why this "massively parallel" effort is inherently more efficient than having elite pacemakers do the job instead?

Here's one: With every cell able to act as a "pacemaker" when they come across food, you have more local up-to-date information (and thus ultimately more food) from a much larger geographical area available to be used by the colony. It's simply a matter of numbers. If, say, only one in every hundred cells were an elite pacemaker and only these pacemakers could signal food, then only 1% of the available food - - the food stumbled across by the pacemakers themselves - - would be signaled to the other slime mold cells. The rest, the other 99% of the food, would only be partially "eaten" by the few particular non-pacemaker cells that stumbled across it, leaving most of it unused.

The same sort of thing will happen in human groups if an "order of dominance and paramountcy" is established, especially when, as is inherent in hierarchy, hierarchist "pacemakers" take over and often don't -- can't -- listen to the folks lower in the hierarchy - - - as we'll see, particularly in Chapter ww, What's Wrong With Hierarchy? Part II

Here's another related advantage: Sharing information enables organisms to anticipate the future, or perhaps more accurately, react to things that are not-here-now to them, that is, to things outside their unaided sensory range. Here's what I mean: When information originates from an organism in a different location from you -- or with a different perspective -- it often reveals one of those neighboring local variations in "reality" before you would otherwise know about it -- before it gets to you (or you get to it). This can give you advanced notice of things from these neighboring areas and thus enable you to anticipate the future a bit, be proactive, and thus adjust your circumstances and behavior ahead of time. Your friend, seeing that baseball about to hit you in the head yells, "Duck!" and you do.

Also not-here-now information can give you guidance you wouldn't get on your own. For example, guidance to food in neighboring areas that you'd otherwise miss, which is what slime mold cells do for each other. A slime mold cell sends cyclic AMP from somewhere to the right (not-here-now) -- and you follow, finding some of that 99% of food that would otherwise be missed.

Such information transmission enables organisms in a sense "to be aware globally (using information transmitted by others), but react locally (combining the transmitted information with what they know locally)." The weather channel shows showers to the west of you so you carry your umbrella. Or, it shows showers only to the east, so you leave it in the car (weather usually travels west to east). In the other direction, you see a funnel cloud and call the weather channel to report it. And wonder which dang butterfly to blame.

The evolved ability for organisms to transmit, amplify, and use external information originating from others of their own kind was a major advance for living things. AND, it's the reason animal "calls" and in us, "voice," evolved. We'll discuss this and it's implications extensively in the next chapter.

There's another set of advantages to such decentralized decision making: You get diversity, and thus what we might recognize as the rudimentary results of "research and development." In the case of the slime mold, for example, individual cells are out in diverse directions, "researching" the location of food. Some of them find it and signal with cyclic AMP while others don't. Thus, when the central mass of the mold moves, it's in a tested direction. And sometimes, when there is food in more than one location, the central organism may split and move in more than one direction.

      In a sense, what this co-Operative sharing does is give successful R&D a pathway to spread its results throughout a population, and thus, also an "excuse" for the system which produces it to evolve. This pathway begins with diversity and provides a way for the successful results to propogate -- to go main-stream. In the case of the slime mold, the diversity of directions the "scouts" go in is critical to discovering the best direction to food. {If that information wasn't transmitted by the cyclic AMP -- or the cyclic AMP was ignored, nothing would happen. }

This strategy defines a process of continual adaptation and successful adjustment to the ever-changing environment. This whole process provides a consistent pathway by which successful diversity constantantly goes mainstream -- until it's displaced by the next wave of successful diversity. This is reflected in successful biological societies of all types, including especially, human societies.

Macro-models of "Spontaneous Order"

Next let's take a look at some examples of "spontaneous order" that we can actually see happening - - -

Most people watching a flock of birds or a school of fish assumed there was a leader, and that all the other animals followed the leader. That was because human beings, like most social mammals, had group leaders. [by this time, we know this last idea is not accurate -lrw]
But birds and fish had no leaders. Their groups weren't organized that way. Careful study of flocking behavior -- frame-by-frame video analysis -- showed that, in fact, there was no leader. Birds and fish responded to a few simple stimuli among themselves, and the result was coordinated behavior. But nobody was controlling it. Nobody was leading it. Nobody was directing it.
Nor were individual birds genetically programmed for flocking behavior. Flocking was not hard-wired. There was nothing in the bird brain that said, "When thus-and-such happens, start flocking." On the contrary, flocking simply emerged within the group as a result of much simpler, low-level rules. Rules like, "Stay close to the birds nearest you, but don't bump into them." From those rules, the entire group flocked in smooth coordination. Because flocking arose from low-level rules, it was called emergent behavior. The technical definition of emergent behavior was behavior that occurred in a group but was not programmed into any member of the group. Emergent behavior could occur in any population, including a computer population. Or a robot population. -Prey, Michael Crichton, Copyright 2002, ^^w pg. 68. ISBN 0-06-621412-2, pg.125

This is a pretty thorough explanation of the emergent behavior we normally call "flocking," a classic example that appears to us as "spontaneous order." Because "flocking" is in the middle of the fast-slow change continuum our senses are designed for, we can easily observe the constant, dynamic, changes of position involved, and thus for convenience, we might call this an example of "dynamic spontaneous order." Because we can actually observe it in action, this type of spontaneous order is probably one of the most useful to study. At least at first.

Notice that Mr. Crichton speaks of the "low-level rules" which produce the flocking process -- and describes the resulant process as "emergent behavior," -- and defines such behavior as "behavior that occurred in a group but was not programmed into any member of the group." In fact, that's a very good definition of any programmed behavior which may produce "emergent behavior," so, for convenience, let's adopt Mr. Crichton's definition: "Emergent behavior," then, is

...behavior that occurs in a group but [is] not programmed into any member of the group. -based on Prey, Michael Crichton, Copyright 2002, ^^w pg. 68. ISBN 0-06-621412-2, pg.125

But, despite this definition, in a certain sense, the birds were programmed to flock. Mr. Crichton explains the program rules: "Stay close to the birds nearest you, but don't bump into them."

Then again, Mr. Crichton is correct in the sense that the birds themselves don't "know" they're in a "flock" -- they're just busy, cat-rubbing-like, following their simple, local, programmed-in rules. And the flocking patterns that develop are almost purely random and are not themselves specifically programmed-in -- and are not predictable. And, "not predictable" is the key phrase as we'll see.

The patterns are based on the complex and ever-changing local circumstances created by the neighboring birds -- and essentially random "external" circumstances such as the dynamically changing location of a predator hawk or eagle. This is the equivalent of a constantly externally re-seeded complex random number generator -- and thus, inherently unpredictable. This is a mild reiteration of the advantages of a constantly changing genome (inherent in sexual reproduction, remember) in countering parasites.

We might recognise "flocking" as an instance of distributed decisions (each bird's programming decides when to zig and when to zag) based on distributed information (the very local -- and constantly changing -- information of where all of the neighboring birds -- and predators -- are).

The "flocking" behavior evolved because it may confuse and possibly intimidate us and other potential predators into imagining the flock is a large, confusing, and perhaps dangerous entity. The "flock," then, doesn't exist as such in birds' brains -- it is, instead, a creation of our minds (and the minds of other potential predators) created by our senses and our local rules of perception and thought. That is, the "flock," like most other "order," is in the mind of the beholder.

And, from a certain perspective, it was the "senses and ...local rules of perception and thought" of organisms similar to ourselves and other predators in the archaic past (which could be confused by such behavior) which made such "flocking" effective and so, through the processes of evolution, made it more likely that "birds" that "flock" would survive and pass their "flocking" genes on. In that sense, we "predators," over huge geological time periods, programmed birds to "flock" -- or rather to "stay close to the birds nearest you, but don't bump into them" -- because of how this behavior affected our -- not their -- nervous systems.

The same sort of observation applies to "schooling" fish. In fact, what might be called "ecological order" literally evolves from such "emergent" interactions among species.

It's also noteworthy that Mr. Crichton mentions "distributed intelligence" and, by noting that "nobody was controlling it, Nobody was leading it, Nobody was directing it," properly labels the common perception that "there was a leader, and that all the other animals followed the leader" as incorrect. However, when he notes, "That was because human beings, like most social mammals, had group leaders," that implies he may be making an "urban literate," "Fallacy Of The Chief," hierarchical mistake about so-called "leadership" tendencies among the majority of us humans. Especially among our small-group ancestors.

So "spontaneous order" can often be observed, even if it can't be predicted very well. In fact, let's take a look at some very visible unpredictable decentralized flocking-like "emergent behavior" amongst us humans - - -

"Critical Mass" bikerides VClip 1

Click here if video doesn't play after a bit.

DemocracyNOW!, March 28, 2005

So "spontaneous order" -- which is sometimes the result of "emergent behavior" -- isn't necessarily mysterious or invisible -- when you know what you're looking at. But once again, notice the difficulty another group of urban literates -- this time the New York City police and "Authorities" -- have in comprehending a "non-hierarchical, non-authoritarian and ... all participatory" entity. This is a clue that we have indeed been hi-jacked, who did it and why.

So, who did it? And why?

^^w

You may have noted the similarity of "Critical Mass" bike rides to the behavior of slime mold (yuck) and ants, not to mention birds "flocking" and fish "schooling" - - - but it's the underlying processes, not the organisms, that should capture your attention. As we already know, not all processes involved in "spontaneous order" are as easily visible or apparent as are those processes involved in "flocking" or "Critical Mass" bike rides. "Market" processes for example.

Markets as Spontaneous Order

With that segway, we will return to the earlier question which baffled those Kremlin bureaucrats: "If the American economy wasn't controlled by 'a secret control center somewhere,' how was it controlled?"

The answer lies in another extremely relevant example of spontaneous order, which, along with slime mold, etc. once again suggests decentralized "spontaneous order" is much more efficient than centralized control, especially in the modern world. The answer is, the American economic system was controlled by "markets."

This notion of control by "markets" is also relevant because it was this particular insight that seriously launched the modern study of "chaos theory" which, if you remember, began life as "spontaneous order," and evolved into "complex systems," "emergent systems," etc. In fact, some claim to have traced the notion of "spontaneous order" as far back as 300 B.C. China (in the Lao Tzu [2]), and certainly to Adam Ferguson and the "Scottish Enlightenment," and then, via. the Austrian School of Economics -- especially Nobel Prize winner Friedrich von Hayek -- into the present.

As we now know, spontaneous order -- or whatever we choose to call it -- originating from living things, depends on the use of distributed information for making "decisions." Among humans, most appropriately for our present topic, markets are the premier case, prodigiously exhibiting distributed decision-making based on distributed information - - -

.... there will enter the effects of particular information possessed by every one of the participants in the market process, a sum of facts which in their totality cannot be known to the scientific observer. It is indeed the source of the superiority of the market order, and the reason why, when it is not suppressed by the powers of government, it regularly displaces other types of order, that in the resulting allocation of resources more of the knowledge of particular facts will be utilized which exists only dispersed among uncounted persons.--F. A. Hayek, "The Pretense of Knowledge," New Studies in Philosophy, Politics, Economics, and the History of Ideas, p. 27.

And, for a non-market example of the use by us modern humans of widely distributed information, remember Noam Chomsky getting all the information that's shared around among colleagues -- and how South End Press operates.

Distributed decision-making based on distributed information shouldn't be much of a surprise - - - it is particularly the superiority of such spontaneous market order that allowed the relatively free, relatively decentralized American system to over- power the centrally Gos-planned Soviet "economy." It was that relatively more decentralized American system, using more of the available though distributed information and thus making better varied and distributed decisions, which ultimately allowed the United States to outlive the U.S.S.R.. And baffle those Gosplan bureaucrats.

Market processes -- and Hayek's insight above -- were central to the evolution of the study of "spontaneous order" for good reason: In the modern world, market forces are by far the most ubiquitous example of processes leading to human-related "spontaneous order." Further, such market processes are the essential foundation for modern "extended order" or "economic" society (which we are attempting to differentiate from face-to- face small-group "tribal" society remember), and, luckily for us, have thus received a great deal of study and attention.

The Main Problem with Spontaneous Order

Lots of folks have problems with what we're calling "spontaneous order" -- and by implication, the processes which underlie it. Including especially as we'll see, market processes.

The essence of most of these problems becomes clear once we note that the word "spontaneous" as used here is directly interchangable with the word "unpredictable." In other words, "spontaneous" just means, "we didn't see it coming." Thus we could as easily speak of "unpredicted (and sometimes 'unpredictable') order" as of "spontaneous order."

And markets are one of the best places to explore the extent of this unpredictability. It is an understanding of this apparently spontaneous and thus non-deterministic and unpredictable aspect of economies and markets which almost certainly led seminal free-trader Adam Smith to speak of the "invisible hand" in his free-market classic, ^^w$ The Wealth of Nations. Also, Hayek's observations on markets were key in spawning the study of these "emergent" phenomena remember. Thus, appropriately, you find the most explicit understanding of the inherent unpredictability in this difficult [3] new discipline in observations of markets.

For example, consider the following from well-known turn-of-the-century Federal Reserve Chairman Alan Greenspan - - -

~About exchange rates, we don't understand these markets as well as we would like. These markets are very complex and they function without anyone really knowing exactly how they do it. There is indeed an 'invisible hand' effect. --to House Financial Services Committee, July 15, 2003
"Congressman, it's very difficult to evaluate potential hypothetical events without fully grasping all the complexities of what they are. When we make policy, I've tended to stay away from trying to project what we might or might not do under certain hypothetical cases because I've found that over the years that when those cases actually emerge, they look quite different from the way I thought they would." --Alan Greenspan, Semi-annual Humphrey-Hawkins Testimony to US House, July 22, 1998
... the markets are so efficient and so complex in exchange rate markets, that it is very difficult to forecast them much in advance. We at the Federal Reserve have spent an inordinate amount of time trying to find models which would successfully project exchange rates, not only ours but everybody elses. It is not the most profitable investment we have made in research time. Indeed it is really remarkable how difficult it is to forecast -- which is another way of saying how successful the markets have become in absorbing the knowledge that everyone has about supply and demand for currencies, supply and demand for goods and services, imports and exports. So our inability to forecast is a testament to how good the markets have basically become. --Alan Greenspan, Humphrey-Hawkins equivalent testimony to Senate Banking Committee, Q&A, July 16, 2002

So, forecasting (predicting), even of such relatively simple "spontaneous order" as interest rates -- which you would think could easily be controlled by the Federal Reserve -- is no slam dunk --

U.S. Secretary of the Treasury Lloyd Bentsen and Laura D'Andrea Tyson of the Council of Economic advisors both refinanced their houses with VARIABLE rate mortgages when FIXED rate mortages were at their lowest rate. If they'd known what interest rates were going to do, they could have saved themselves a lot of money by getting fixed rate mortgages instead! "Does this make you feel any better about sending your tax dollars to Washington?" --David Brinkley's tag line, ThisWeek with David Brinkley, 4 Dec 1994

And interest rates aren't the only non-deterministic market factors. In fact,

Greenspan: "...nobody can forecast." VClip ?

Click here if video doesn't play after a bit.

FED Chair Greenspan, to House Oversight Committee, CSPAN, October 23, 2008

So, as far as forecasting economic events goes, particularly when operating fiat economies, nobody has a crystal ball - - -

"Clearly, no one's got a crystal ball." --U.S. Treasury Sec. Henry Paulson VClip ?

Click here if video doesn't play after a bit.

ABC's This Week, March 4, 2007

This difficulty in anticipating the future isn't limited to economics by any means. Take this presentation from "Strategic Trends," an assessment of the future from the British Ministry of Defense, described this way in the introduction for example:

Strategic Trends is an independent view of the future produced by the Development, Concepts and Doctrine Centre (DCDC), a Directorate General within the UK's Ministry of Defence (MOD). It is a source document for the development of UK Defence Policy. ...
Understanding Change
In our analysis, we have tried to steer a measured course between the rocks of simplistic extrapolation from contemporary, emerging features and floating vague, meaningless generalizations and banalities about the future. ...The future is characterised by a bewildering number of variables and all trends inter-relate with each other and inter-react in dynamic ways; some judgements are based on uncertain and limited evidence, others rely on political decisions, which can be reversed or accelerated, and all are vulnerable to unforeseeable events and the vagaries of human action. ...
We believe that the future will happen as a result of long-wave themes and developments that unite the past, the present and the future. However, one constant evident in history -- the power of contingency and surprise -- will continue to dominate our future, which will be influenced and punctuated by unexpected events, startling surprises, major discontinuities and the pervasive operation of chance. ...
I would ask readers to remember that, to paraphrase von Moltke, parts of our projected landscape are unlikely to survive first contact with the future, mainly and inconveniently because of the tendency of human beings to interfere with the scenery and to act and react in unforeseen, non-linear ways. Nor do similar causes lead to similar outcomes; things are just too complex, with a great many variables, decisions and actions that interact with human behaviour in an almost organic manner. Indeed, discontinuities, insecurities and volatilities seem to be proliferating all the time and future changes seem to be accelerating towards us at a faster rate than we might have expected. --The DCDC Global Strategic Plans Programme, 2007-2036, Third Edition, Rear Admiral C J Parry CBE [from British MOD (Ministry of Defense)]

Why "Order" May Seem Spontaneous -- and Be Unpredictable

So, predicting the future is not, to say the least, a slam-dunk. Especially when "spontaneous order" is involved. Why not? Stick with me here for a little side trip - - -

Suppose you're a Kalihari Bushman. You've spent your entire life -- until now -- in the desert and have never seen pictures, videos, or read any articles, or talked to anyone about so-called "civilization." But a film crew has been looking for someone just like you to expose to "The Big City" for the first time -- Las Vegas, Nevada in this case -- just to see how you'll react.

You're an expert tracker and you notice things. On the way from McCarran Airport into Vegas, you pass an empty field and your tracker sense duly notices it.

One year later the film crew brings you back to Vegas for a follow-up. You pass that same field, but now it has a giant building on it, flashing neon lights, hundreds of people flowing in and out, the Full Monty.

To Bushman-you, this looks like a case of "now you don't see it, now you do." Because you weren't privy to the underlying processes that produced the building, its "sudden" appearance on a previously empty field seemed to you as almost magical. To Bushman-you, it's a case of "spontaneous order."

So, "spontaneous order" is often just the noticed result of unperceived and/or unnoticed "precursor" processes, that is processes that occur before something else does. Now to "urban literate" you-and-I, this example may seem silly. Even if, like the Bushman, we didn't see any of the precursor construction process, it doesn't seem magical to us -- because we know, in general at least, how construction processes work and can easily imagine how they could lead to that Vegas casino. We could probably even find time-lapse film of such construction processes on, say, The Discovery Channel.

The problem is, however, we can't always perceive precursor processes. There are many cases when the assumed underlying precursor processes that precede what we perceive as "spontaneous" are just too subtle, volatile, complex, and/or dispersed -- or several of the above -- for anyone to observe under any circumstances -- let alone measure accurately, analyze or use in accurately anticipating an outcome. In some cases, they may not be perceptible at all, perhaps not exist at all! What caused that milk to suddenly go sour?

We'll take a thorough look at all these cases in the next chapter. When we do, we'll find the Bushman scenario is an appropriate analog to other situations where we can't see or measure -- and perhaps not even imagine -- precursor processes. In short, for various reasons, we're often, unavoidably, in the position of the Kalihari Bushman. In fact, being out of direct touch with those precursor processes is often what makes all sorts of things spontaneous and unpredictable. The size, time and location of the next major meteorite impact, for example - - -

It is really only in the last few years that astronomers have begun to count and keep an eye on the rest of the asteroid community. As of July 2001, twenty-six thousand asteroids had been named and identified-half in just the previous two years. With up to a billion to identify, the count obviously has barely begun.
In a sense it hardly matters. Identifying an asteroid doesn't make it safe. Even if every asteroid in the solar system had a name and known orbit, no one could say what perturbations might send any of them hurtling toward us. We can't forecast rock disturbances on our own surface. Put them adrift in space and what they might do is beyond guessing. --Bill Bryson, A Short History of Nearly Everything, (U.S.A.: BROADWAY BOOKS 2003) pg. 193 ^^w$
An asteroid of a similar size to a rock that exploded above Siberia in 1908 with the force of a thousand atomic bombs whizzed close past Earth on Monday, astronomers said on Tuesday.
2009 DD45, estimated to be between 21 and 47 meters (68 and 152 feet) across, raced by at 1344 GMT on Monday, the Planetary Society and astronomers' blogs reported....
2009 DD45 was spotted last Saturday by astronomers at the Siding Spring Survey in Australia, and was verified by the International Astronomical Union's Minor Planet Centre (MPC), which catalogues Solar System rocks. --Space rock gives Earth a close shave, Mar 3 05:56 AM US/Eastern

So, even in cases when we can perceive precursor processes, the context may be too complex -- or that perception may not be clear enough -- for us to usefully predict an outcome. Particularly a deterministic one. Or even one that's "actionable." - - -

Interestingly, because these things [asteroid trajectories] are so difficult to compute and must incorporate such a significant margin of error, even if we knew an object was heading our way we wouldn't know until nearly the end -- the last couple of weeks anyway -- whether collision was certain. For most of the time of the object's approach we would exist in a kind of cone of uncertainty. It would certainly be the most interesting few months in the history of the world. And imagine the party if it passed safely. --Bill Bryson, A Short History of Nearly Everything, (U.S.A.: BROADWAY BOOKS 2003) pg. 205 ^^w$

There's another aspect of "spontaneous order" or "emergent behavior," etc. that makes it seem spontaneous: The outcome of a process is often very sensitive to tiny differences in the precursor processes. In fact, the differences may be so subtle that even if we can perceive them, they can't be measured accurately enough or quickly enough to use them for predicting any particular outcome. Throwing a single, honest, six-sided cubical die, for example. You know a number -- one through six -- will turn up, but you can't tell which one, because there's no way to exactly measure the angle the leading edge will impact the green felt, nor the exact local coefficient of friction at the point of impact. Nor, in fact, the exact point of impact. Etc.

This notion has been popularized, and, fortunately for those trying to explain it, has made it's way into the popular culture as "The Butterfly Effect." It is often presented as the possibility that a butterfly flapping its wings in Brazil -- a very tiny precursor difference indeed -- might cause a tornado in Kansas. Or the microscopically different angle the leading edge of that dice hits the green felt busts you out. Or makes you rich. And predicting that dice (with only six reasonably probable outcomes) is easy -- compared to the much more complex "real" world.

Worse yet for predictability, there is human action. That is, there is constant trial-and-error -- or even more advanced, trial-based-on-hypothesis-and-error powered change always going on. And this (mostly memetic) engine of change {tends to} mirror the "real world," remember -- where living things (including us) continually adapt to "external" underlying change by updating our information and varying our own behavior. We spent the previous chapter (Chapter 17, Diversity vs. Change) exploring just why such change -- and especially variation in our behavior -- are desirable, even necessary. "Don't put all your eggs in one basket," remember.

So, by these memetically powered processes, mostly "hidden" in individual (and often distributed) minds, over time, the things, processes, and ideas that work best become established to be unpredictably replaced in turn when and if they become obsolete at the hands of yet newer things, processes, and ideas remember. For convenience, we might call this effect, "memetically based evolution." And this doesn't just happen serially in one location or subject area, but in literally hundreds of millions of brains, associations, and places simultaneously all over the world -- that is, all over the memetic landscape, sometimes called the "noosphere".

And, especially because of the inherent volatility of memetic content, such changes in the modern memetically powered world, super-charged by the internet, often occur much more rapidly and unpredictably than in non-memetic nature. [4] Thomas Edison invents the light bulb. Albert Einstein imagines the "Theory of Relativity" -- which enables the "Manhattan Project" to produce two different types of nuclear bomb. Lehman Brothers Bank goes {bankrupt | belly up} (Sept. 15, 2008) -- and almost immediately causes economic shock-waves all around the world.

There's another submerged source of unpredictability: There's a very subliminal assumption we regularly and usually unconsciously make: It is that we live in a world of "closed systems." A "closed system" is something completely isolated from its surroundings. [EXAMPLE] This is the minor assumption regularly made by systems analysts anytime they draw a block around a part of a subsystem they're trying to analyze. But, this sort of assumption is also nearly always subliminally built-in to most knowledge forms as well.

There's a problem: "Closed" systems only exist in the imagination, rarely, if ever, in the real world.

Alvin Toffler describes the ideas of Prigogine and the Brussels school as follows: "Summed up and simplified, they hold that while some parts of the universe may operate like machines, these are closed systems, and closed systems, at best, form only a small part of the physical universe. Most phenomena of interest to us are, in fact, open systems, exchanging energy or matter (and, one might add, information) with their environment. Surely biological and social systems are open, which means that the attempt to understand them in mechanistic terms is doomed to failure." --Order Out of Chaos, p. XV

What does this mean? Well, let's take an extreme example: Suppose an asteroid the size of Mt Everest hits the earth in the Yucatan area - - - very bad and unexpected news for the dinosaurs.

Of course, "outside" influences don't need to be that rare or dramatic. The point is, in real life, things regularly come from outside the conceptual boxes we regularly if subconsciously imagine around ourselves and our environment -- and these unexpected "outside" influences make things within those conceptual boxes even more unpredictable than they would otherwise be. Your mother-in-law shows up for an unexpected visit. An out-of-control SUV "visits" your living room. --MSNBC, November 21, 2007

So, like it or not, we are subjected to at least four intractable sources of unpredictability: Unperceived precursor processes, sensitivity to initial conditions (The Butterfly Effect), human action powered by memetically based evolution, and events originating from outside the conceptual box. [5] These four sources of unpredictability largely explain why economist Mises -- in tune with Yogi (quoting quantum physicist Niels Bohr?) observed that "to acting man, the future is always hidden." [6]

Spontaneous Order vs. Central Control

There's an intractable problem at the heart of all this: It's that "control" of any kind requires accurate anticipation of the future - - -

~No matter how skeptical you are about macro economic forecasting, if you're going to pursue monetary policy, you still have to make those forecasts. ... If you're a quarterback, you have to lead the receiver and throw the football, not where the receiver is, but where he's going to be. It's the same in the case of the economy. --Federal Reserve Chairman Ben Bernanke, ~June 5, 2006

So Mr. Bernanke recognizes that in order to "pursue monetary policy," more humble anticipations of the future -- appropriately labeled "forecasts" rather than "predictions" -- are necessary. And, implicit in his analogy is the assumption that the quarterback knows where the receiver will be when the football arrives. Such assumptions are too often unwarranted -- and when the quarterback is wrong about where his receiver will be, he throws the ball away -- or throws an interception.

Further, this need of accurately anticipating the future in order for control to work applies across the boards, not just in the case of football and the economy. But, as we now know from the previous section, because of unperceived precursors, The Butterfly Effect, human action powered by memetically based evolution, and events from outside the box, such accurate anticipations of the future aren't easy to come by in any area. As Mises, Yogi, and Bohr have observed -- and as echoed by the British MOD's Rear Admiral C J Parry above -- in general, accurate prediction is very difficult. Meaning, "often wrong." Leading to interceptions, economic down-turns, unexpected "terrorist" attacks, etc.

And, by the way, it's very appropriate to be skeptical "about macro economic forecasting" in modern "fiat" (paper money) economies - - - Greenspan at an earlier date [7]

"Unfortunately monetary policy is not possible without forecasts. There are no mechanical rules we can follow in making these forecasts. I wish there were, but there just aren't. Even when we get a large number of forecasters and they all more or less agree, there's no guarantee they're correct. ... After all, we're all looking at the same data. I mean, this isn't a coin toss operation. We're right about 60% of the time." --Federal Reserve Chairman Alan Greenspan, C-SPAN, March 13, 1991, 22:00 - 22:30 pm.

And there's a compounding problem: A central controlling body -- like a government or the Federal Reserve -- almost always puts all the eggs in one basket. And the more than 40% of the time the Federal Reserve admits it is wrong, everyone in the country suffers. The same goes for other centralized decisions. Remember Gosplan's final result. Etc.

Meaning that in general, useful central "control" is not only very difficult but also -- putting all the eggs in one basket as it does -- usually unwise. [8]

And, in addition to breaking everyone's eggs when their predictions are wrong, there's another compounding problem with central controlling bodies. It's those pesky local variations, remember. New York is seriously different from Hong Kong. And Washington D.C. from Los Angeles, and even Pittsburgh from Philadelphia.

Further, things are different from place to place even on a much smaller scale -- the different anti-bacterial drugs used by different hospitals, for example. So the problem is, a prediction which is accurate for one place and time may quite obviously be inaccurate for another. So, rules, regulations, orders, controls and behaviors based on that prediction which may work in one place at a particular time often don't work in another place or at a different time. Although we do it here in the united States, you wouldn't want to drive on the right-hand side of the road in the formerly British colony of Hong Kong, for example. [9]

As a rule of thumb, as the area you're trying to control gets larger, it becomes more and more difficult to make an accurate anticipation of the future that applies equally over the entire area. Further, as the area gets larger and larger, there are more and more "local" places where the wide-area predictions (and the resultant rules, regulations, orders, controls -- and particularly behaviors -- based on them) don't apply at all and, to understate the matter, aren't useful - - -

Three New Jersey townships --Upper Pittsgrove, Alloway, and Quinton-- have recently contracted to have elevator inspectors, reports the February Reader's Digest. There's only one problem: there are no elevators in any of the three municipalities.
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Last June, the NJ Department of Community Affairs ordered all of the state's 567 towns to provide for elevator inspection service. A spokesman said the state cannot make exceptions to the rules --even for municipalities without elevators. "Otherwise," the spokesman said, "the Uniform Construction Code would no longer be uniform." --LP News, March 1993

Clearly more local control makes much more sense. Unfortunately, especially when it comes to "centralized political authority," such all-the-eggs-in-one-basket thinking is the rule rather than the exception. And just as often, the excuse for such centralized control is just as thin as, "the Uniform Construction Code would no longer be uniform" -- as if uniformity in the face of diverse circumstances makes some sort of sense.

And of course, there's the time dimension: A rule, regulation, order, control or behavior may be appropriate today but inappropriate tomorrow. Or perhaps it was appropriate yesterday, but isn't today. There's always a time lag as information wends its way up any chain-of-command - - - and commands (and/or rules, regulations, etc.) find their way back down again. The problem is, "centralized political authorities" -- the major source of rules, regulations, orders, and controls -- aren't nearly flexible enough to deal with this fact of reality. [10]

So, especially with centralized political authority, you may find yourself living in a location where the general rule doesn't apply -- or no longer applies. But you're still paying for elevator inspectors. Etc.

There's also another problem: Central hierarchies, especially those attempting centralized political authority, attract people with hierarchical tendencies, people who, as Daniel Webster observed, "mean to be masters" -- and more troublingly, those who have a genetic predispostion for it. Think "Shock and Awe," remember. And they have a tendency to attempt even more centralized political authority -- resulting in even more all-eggs-in-one-basket results.

And, particularly for such people -- and others who believe things must always be centrally controlled in order to be "stable" and "orderly" -- there's a serious psychological problem{ inherent in all this}: Since processes which lead to spontaneous order are often largely unpredictable -- and control requires accurate prediction -- spontaneous order is largely less than satisfactorily controllable -- more likely uncontrollable. Especially by centralized hierarchies with their time-lags, putting all your eggs in one basket, etc. - - - and those attracted to them.

Another serious and directly related problem: In direct contradiction to our instincts for freedom -- and in opposition to the massive parallel trial and error which powers "spontaneous" evolution -- most of us have come to believe exactly the opposite, that the more complex and unpredictable things are, the more we need central control. By the time you read this, this has probably been recognized as an extremely costly misperception. I hope.

To sum-up then, there are at least three main prediction-based control problems for central controllers -- and two related psychological ones:

1. Because of the unpredictable nature of spontaneous order, consistently accurate predictions are elusive, and thus the decisions based on them are often wrong. When the decisions are wrong, the nature of central control -- putting all the eggs in one basket as it does -- means that all those involved, voluntarily or not, lose.
2. The larger the area over which control is attempted, the more sub-areas there will be for which a particular prediction (or more subliminal anticipation of the future) will be "wrong" -- and thus for which any resultant central action will be at very least inappropriate. Hiring those New Jersey elevator inspectors for example.
3. The time lag introduced by centralized control's "chain-of-command," etc.
4. The first psychological problem is that centralized political control requires hierarchy, and thus attracts those people who "mean to be masters" -- despite the fact that hierarchies are ill-suited for controlling spontaneous order, complex systems, and in fact, most things. As we'll see in Chapter ww.
5. And finally, despite the preceding, people believe central control works. [11]
But for better or worse, hierarachist or otherwise, "emergent systems" -- those of our own making and otherwise -- are unavoidably a major and integral part of our "reality." As a result, one problem with spontaneous order and emergent systems -- including especially markets -- is that constant, often seemingly random and regularly unpredictable -- and thus uncontrollable -- change is inherent in them.

As a result of all this uncertainty, the Patagonian idiom, "walking backwards into the future" is often quite appropriate. Think of the accuracy of "long range" weather forecasts (about 60% accurate and only for about six to ten days at that -- and with about the same accuracy rate as FED interest-rate forecasts), relatively simple compared to forecasting human behavior. AND this directly implies diversity since you want alternatives for that 40% of the time -- and the sub areas -- for which the central controllers are wrong.

Especially in a constantly changing world, the only realistic stability is the stability of a working surfboard. In fact, "stable" and "orderly" are largely fictions -- as we'll particularly see in the next chapter. But, rather than seeing "change" as an opportunity, we tend to see it as an enemy. As a result, the constant and relatively rapid and unpredictable changes associated with "spontaneous order" itself -- and thus any processes which produce it -- are often viewed as "disruptive" and/or "destabilizing." Especially by -- but not limited to -- the hierarchically inclined.

And although markets aren't the only places we experience complex systems leading to "spontaneous order" and "emergence," as modern humans, it is one of the main places. So, those "disruptive" and/or "destabilizing" processes clearly include "market processes." This has some very significant ramifications as we'll see, beginning in Chapter wn, "Why NOT To Trade."

None the less, despite the difficulties and down-sides, human hierarchies, attempting to maintain "centralized political authority," often try to control everything everywhere anyway. When they almost inevitably fail, they try more of the same, making things even worse. And we tend to cheer them on. Or at least tolerate them.

Largely because of the foregoing -- particularly the notorious inaccuracies of anticipations of the future and hierarchical chain-of-command time lags -- the results of attempts to centrally control spontaneous order and emergent systems -- especially when combined with gambler's ruin -- is not good. In fact, the resultant staple of attempting such central control has also become -- along with "The Butterfly Effect" -- relatively famous. As "unintended consequences." It has, only slightly tongue in cheek, spawned formulations such as The Law of Eristic Escalation (Imposition of Order = Escalation of Chaos). Of course, most people -- let alone most of those with hierarchical inclinations -- are just barely beginning to understand this rather perverse fact of life.

The Alternative(s) To Central Control

The observations that central control puts all the eggs in one basket, that central decisions are often inappropriate for local conditions, and that at any rate, central decisions usually suffer a time lag, all imply not only that central control is regularly inappropriate, but implicitly suggest decentralized control -- that is, distributed decisions based on distributed information -- as the alternative. We'll take a detailed look at each of these implications in turn - - - - that central control is regularly inappropriate, particularly in Chapter ww, What's Wrong With Hierarchy? Part II -- and that decentralized control is the alternative, particularly in Chapter ta, The Alternatives -- and we'll compare the two in Chapter co, Comparisons.

Since I remember how hard it is to accept both of the above propositions, however, we'll take a look at a few examples to tide you over - - - but first, a closer look at the advantages of local control.

Alan Greenspan noted in testimony at various times that, in the days before the Federal Reserve, interest rates varied from region to region. Further, Greenspan admits, local bankers are likely to know more about their borrowers and the local situation than the centralized FED could ever know.

The overall advantage of such a decentralized approach is that sometimes, when the overall FED macro-economic forecast was wrong, in some areas a correct forecast would be made locally and, on the other hand, that sometimes, even when the overall FED forecast was right -- but incorrect for certain local areas -- local forecasts in those areas would be correct.

This advantage would be particularly strong in any area where the central FED forecast was regularly incorrect for that area, but it would also be an advantage in areas where the central FED forecast was only wrong sometimes. Thus in both cases, local control makes a better overall record possible than when things are centrally controlled -- and everyone's forced to go along.

The big advantage though is that, even when a local prediction was wrong, there would be some surrounding areas that didn't make a mistake so, unlike the situation with central control, you wouldn't have an all-in-one-basket catastrophic failure over the whole area at once.

Even in the unlikely case that the overall record of the smaller areas is less than 60% accurate -- the claimed FED overall accuracy record remember -- the advantage that you never have a catastrophic all-eggs-in-one-basket loss over the whole centrally controlled area far outweighs any disadvantages. Hurricane Katrina was bad, but neighboring states and the whole rest of the country were OK and could send help. Now imagine fifty Katrinas striking all fifty states at the same time. As, essentially, a bad FED forecast does.

Despite this, the notion that central control is often inherently inferior to decentralized control is highly unusual to current (2007 A.D.) thought and quite revolutionary to many people. In fact, the very idea of decentralized control at all, that is, "distributed decisions based on distributed information," as we've seen, is quite difficult for most people to even accept as real, let alone as a realistic alternative to central control and hierarchy. From now on, however, it will be a recurring theme, and perhaps by the end of "HI-JACKING," you might take it seriously.

In the mean time, let's take a look at those examples of decentralized control just to break the ice - - -

For more than four years ... civil engineers have been studying the destruction of the World Trade Center towers ... . And it turns out that one of the lessons is: Disobey authority. In a connected world, ordinary people often have access to better information than officials do. ... The report confirms a chilling fact ... After both buildings were burning, many calls to 911 resulted in advice to stay put and wait for rescue. Also, occupants of the towers had been trained to use the stairs, not the elevators... Fortunately, this advice was mostly ignored. According to the engineers, use of elevators in the early phase of the evacuation, along with the decision to not stay put, saved roughly 2,500 lives. ... Anybody who has been paying attention probably suspects that if we rely on orders from above to protect us, we'll be in terrible shape. ... not authoritarian schemes of surveillance and punishment, but multichannel networks of advice, information, and mutual aid [is what we need]. --Question Authorities, www.wired.com, Issue 13.06 - June 2005 *Why it's smart to disobey officials in emergencies*
Three days before landfall, [Hurricane] Rita bloomed into a Category 5 and tracked toward the city. City and Harris County officials told Houstonians to hit the road, even while the population of Galveston Island was still clogging the freeways. The evacuation itself wound up far more dangerous than the storm: 110 people died during the effort, while the eventual Category 4 storm killed nine. --Ike whips up waves as it steams toward Texas, Sep 12 01:12 PM US/Eastern, By JUAN A. LOZANO, Associated Press Writer

And, in fact, we can generalize - - -

Research reported in New Scientist in May 2008 [72] found that blogs, maps, photo sites and instant messaging systems like Twitter did a better job of getting information out during emergencies such as the shootings at Virginia Tech than either the traditional news media or government emergency services. The study, performed by researchers at the University of Colorado, also found that those using Twitter during the fires in California in October 2007 kept their followers (who were often friends and neighbors) informed of their whereabouts and of the location of various fires minute by minute. Additionally, organizations that support relief efforts are also using Twitter. The American Red Cross uses Twitter (http://twitter.com/RedCross) to exchange minute-to-minute information about local disasters, including statistics and directions.[73][74]... --Twitter, From Wikipedia, the free encyclopedia
What a day! I am humbled and inspired, grateful and thrilled for this vast outpouring of support.
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On just one day, in honor of the 234th anniversary of the Boston Tea Party, the new American revolutionaries brought in $6.04 million, another one-day record. The average donation was $102; we had 58,407 individual contributors, of whom an astounding 24,915 were first-time donors. And it was an entirely voluntary, self-organized, decentralized, independent effort on the internet. ...
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The establishment is baffled and worried, and well they should be. They keep asking me who runs our internet fundraising and controls our volunteers. To these top-down central planners, a spontaneous order like our movement is science-fiction. But you and I know it's real: as real as the American people's yearning for freedom, peace, and prosperity...
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All over America, all over the world, we are inspiring real change. With the wars and the spying, the spending and the taxing, the inflation and the credit crisis, our ideas have never been more needed.
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Sincerely,
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Ron Message from Ron [Paul] (12/17/07)

In fact, despite the massive biases we urban literates have as the result of growing up in hierarchical cultures, there's real- world evidence that, in addition to markets, radically decentralized systems of all kinds are inherently much more efficient at all levels, especially in the complex world of today (2007 A.D.). Here's another hint - - -

"The Somali nation abolished its central government ten years ago and became a stateless nation," the article begins. "During that time, the fears expressed by many international observers that Somalia would fall into chaos have not only not been realized, but many Somalis are finding statelessness an agreeable condition. Somalia is more peaceful, and the people are becoming more prosperous. Boosaaso, located at the tip of the Horn on the Gulf of Aden, is a case in point. When Somalia had a central government, Boosaaso was a small village. ... Officials of the Republic crawled over these boats [in Boosaaso's harbor] collecting taxes and demanding payment for every kind of service, real or imagined.
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"With the demise of the Republic, control passed to the local community and the port began to be managed on a commercial basis. A lively import/export trade developed and soon reached an estimated value of U.S. $15 million per year. Private enterprise provided essential public services such as trash collection and telecommunications. In eight years, the population grew from 5,000 to 150,000. Parents and teachers put up schools for their children and even built a university. In the absence of a government-run court system, the heads of extended families of contentious parties settled disputes on the basis of customary law.
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"While Boosaaso is a dramatic example, its experience is more the rule than the exception throughout Somalia. Somalis are thriving and prospering without a central government. Exports in 1998 were estimated to be five times greater than they had been under the Republic." --Alan Bock, Is Somalia a Model?, April 29, 2003
As counterintuitive as it is to us modern urban literates, there are other societies in history with similar experience -- as long as they avoided a "Great Transition" and managed to get and/or stay free of "centralized political Authority," that is. [12] The Iroquois Confederation for example -- and the forerunner of the United States under the Articles of Confederation. We'll see if such radically decentralized systems are viable and desirable in the modern world, particularly in Chapter ta, The Alternative(s), and, Chapter co, Comparisons.

So, despite the destabilizing effects, you can see that like the slime mold, having individual humans and small groups each doing their own independent thing, especially in terms of variety and adapting to varying local conditions etc., is, paradoxically, more efficient than having our societies controlled by elite central "pacemakers" such as the former Soviet Union's Gosplan -- or the central planners in Washington D.C. or at the Federal Reserve. Or, even, 911 emergency-call operators - - -

With free markets and other sorts of decentralized systems -- instead of central planning -- each human and small group can co-operatively instigate local behavior rather than waiting and hoping a persistent hierarchical leader will be in the right place at the right time with the right information and motivation -- and correctly understand and act on it. Remember the 99% advantage with the slime mold -- every cell able to recognize and signal food vs. only one-in-a-hundred "elite" pacemaker cells. And remember the five-fold advantage Bob Waldrop's opposition got from similar non-hierarchical co-operation -- and Robert Axelrod's observation that, "benefits sought by living things such as people are disproportionately available to cooperating groups."

FIVE ADVANTAGES OF DECENTRALIZED LOCAL CONTROL:

1. Local control leads directly to diversity which operates as both R&D and insurance;

2. local differences mean local control makes an over-all better record possible than can be obtained by central control (the uncertainty of rain forecasts and interest rate forecasts are examples);

3. catastrophic all-eggs-in-one-basket failures are likely prevented, or, at very least, made much less likely;

4. more local people -- because they are more likely face-to-face acquaintences -- are more likely to be motivated to take care of local problems than are more remote centralized, impersonal, bureaucratic structures, manned by strangers.

5. local help, involving local people, is always there -- if it hasn't been atrophied by being pre-empted by less efficient, less motivated far-away external structures which traditionally show up late and sometimes not at all. AND absorb local resources which could otherwise have been used locally.

This type of advantage is the basis of at least half of the ecology/environmental movement's call to "Think globally, act locally." In particular, the "act locally" part. [13] In fact, to the extent you network with others -- and don't have to buck the hierarchical structures which are attempting to "stabilize" things -- "acting locally" may be quite sufficient -- though "thinking globally" may save your local group a lot of time and effort since, thinking that way, it may know the "storm" is coming ahead of time. Another heresey we'll look at again later -- particularly in Chapter ta, The Alternatives.

It is this decentralized approach that produces spontaneous order in human endeavours and, likely, an insight into spontaneous order that led French anarchist philosopher Pierre-Joseph Proudhon to write, "Liberty is the mother, not the daughter, of order."

Where Do YOU fit?

Do you think there must be some central authority controlling everything, or else things won't work? Do you sympathize with those puzzled Kremlin officials . . .

...Schevchenko reported that top Kremlin officials "are simply baffled by the American system. It puzzles them how a complex and little-regulated society can maintain such a high level of production, efficiency, and technological innovation. Many are inclined toward the fantastic notion that there must be a secret control center somewhere in the United States." --Michael Rothschild, Bionomics; Economy as Ecosystem, (New York: Henry Holt and Company, Inc. 1990), p. 257

Or does this make more sense to you - - -

What those calling themselves planners advocate is not the substitution of planned action for letting things go. It is the substitution of the planners own plan for the plans of his fellow-men. The planner is a potential dictator who wants to deprive all other people of the power to plan and act according to their own plans. He aims at the one thing only: the exclusive absolute pre-eminence of his own plan." --Ludwig von Mises

Do you feel uncomfortable without a hierarchy and a pecking order? When U.S. President Ronald Regan was shot -- if you're old enough to remember -- did you resonate when Alexander Haig grabbed the mike and roared, "Don't worry, I'm in charge, I'm in charge"?

Then, I would suggest, you are genetically predisposed to be hierarchical -- or you're an egalitarian that's been sold a bill of goods.


Summary

Spontaneous order is something measurable that happens, quite often unexpectedly, apparently without any central control of any kind, and it tends to baffle especially us moderns who regularly look for controllers or "pacemakers" controlling everything -- the Kremlin officials who tried to explain why the U.S. economy was so efficient by suggesting there must be a secret control center somewhere for example.

In the case of living things however, spontaneous order often comes about as a result of massive, parallel, trial and error. The "spontaneous order" happens when, because of the success of a particular strategy, "amplification" takes place. At the simplest level -- we used drug resistance as an example -- amplification happens when more and more organisms geometrically incorporate and emit that successful genetic information by reproducing it in their necessarily multitudinous offspring.

Slime mold's use of acetylcholine as a signal, ant trails, and bee dances demonstrate non-genetic information transmission may also lead to "spontaneous order," and because of this information dimension, we suggested calling such processes "information games." We discovered again -- adding slime mold, ants and bees to the fallacy of the chief, etc. -- that it's very difficult, even for most scientists, to understand and/or accept the viability of this kind of spontaneous- order-producing non-hierarchical system. But, given just the examples of ants, bees -- and our small-group ancestors, it's clear such systems are quite viable. Since these systems have no pacemakers or other central control, they are examples of control by "distributed decisions" based on distributed information -- and thus, in groups, examples of co-Operation.

The advantages of co-Operatively sharing such decentralized information is mostly a result of organisms receiving not-here-now (non-local) information filtered through the nervous systems of others of their own kind. These advantages, powering the evolution of animal calls -- and our voices and language -- include being able to react to something "someone" else senses or knows but you don't -- other, relatively distant slime mold cells -- or your friend who yells, "Duck!." In a sense, this sometimes enables you to anticipate the future a bit and act locally based on "global" not-here-now information: You carry an umbrella based on the information you get from the weather channel. This whole process provides a consistent pathway by which successful diversity constantantly goes mainstream -- until it's displaced by the next wave of successful diversity.

We looked at some macro models of spontaneous order in the form of flocking birds, schooling fish -- and "Critical Mass" bike rides, and adopted Michael Crichton's definition for "emergent behavior," as "behavior that occurs in a group but [is] not programmed into any member of the group." We suggested that what might be called "ecological order" results from "emergent" interactions among species -- and observed that such behavior isn't the result of follow-the-leader but again, distributed decisions based on distributed information -- and, once again, that it's difficult for those with a hierarchical bias to understand the "non-hierarchical, non-authoritarian and all participatory" processes that create such order at any level.

Recalling those baffled Russian bureaucrats, we suggested that, rather than a central controlling organization like Gosplan, what controlled the remarkably productive American economy were decentralized spontaneous order producing structures we recognize as "markets." We noted that while the original recognition of "spontaneous order," may go back as far as 300 B.C. China and the Lao Tsu, modern manifestations -- including "chaos theory," "emergent systems," etc. -- probably came to us via Austrian Economists' studies of these "markets," particularly via F.A. Hayek's insight on distributed information use being markets' main strength and characteristic -- when not interfered with by governments.

We noted that markets are not only the most ubiquitous examples of "spontaneous order" occurring as a result of human activity, but, in the modern "urban literate" world, also the basis of "extended order" society (as contrasted to small-group face-to-face "tribal" society) -- and recalled that making a distinction between the two has been a main goal of The HI-JACKING of Civilization.

We suggested that "spontaneous" as we're using it really means, "we didn't see it coming," and that "we could as easily speak of 'unpredicted' (and sometimes 'unpredictable') order' as of 'spontaneous order'." That's because the kind of widely distributed, subtle, and constantly changing information we're dealing with here is impossible for any single observer, hierarchist -- or even computer -- to obtain and update, let alone comprehend. We recalled with Mises, Yogi, and Neils Bohr that "Prediction is very difficult."

To explain this, we presented a Macro-model of spontaneous order via a hypothetical Kalihari Bushman seeing a new building "magically" appear between separate visits to Vegas.

When some of this key information isn't genetically hardwired -- that is it originates externally rather than internally -- it may be slightly different from place to place. Ideally this difference reflects those local variations in "reality" -- and thus allows individual organisms to not only benefit from transmitted information, but also from being able to adapt it to their own, at least slightly different, local, situation, often in the form of predictions. Weather forecasts for example. And to pass it on. The ability to use non-genetic information made multi-cellular organisms with non-trivial life-spans practical.

In order to get a feel for how spontaneous order works and what it is, we looked at several examples. First, we looked at the classic examples, the aggregation of slime mold organisms when food is scarce -- and ants. We found that "spontaneous order" processes saved an estimated 2,500 lives during the 9-11 attacks and discovered the OODA loop, which indicates that spontaneous order market processes are at least six times more efficient than hierarchies and central control. We also looked at the spontaneous evolution of order in stateless Somalia, and finally, via Nobelist Hayek, the spontaneous order that occurs when free markets aren't prevented from happening.

Recalling the discussion on hierarchy and communication from Chapter 15, we suggested the OODA-indicated advantage spontaneous order producing processes have over hierarchy and central control is directly embedded in the inherent inefficiencies of the "chain of command" -- and that central Authorities obviously can't know everything that's happening everywhere.

^^wAnd, particularly for those with hierarchical tendencies and others who believe things must always be controlled -- and thus theoretically "stable" and "orderly" -- there's also a serious psychological problem inherent in all this. As we now know, because of those "unperceived precursor processes," "The Butterfly Effect," and memetically based evolution, etc., processes which lead to spontaneous order are often largely unpredictable. And thus, since control requires accurate prediction, spontaneous order producing processes are largely uncontrollable. And worse, one-size-fits-all centralized decisions are almost never satisfactory for everyone effected by them. And they always risk gambler's ruin. Especially by centralized "Authorities."

So hierarchies -- and hierarchists -- striving for "centralized political authority" as they regularly do (and hampered with the problem of inaccurate prediciton, local variation, and gambler's ruin) are psychologically bothered by the extreme difficulty of "controlling" spontaneous order, particularly because of the difficulty of accurate and uniform wide-area prediction.

And worse, one-size-fits-all centralized decisions are almost never satisfactory for everyone effected by them. And they always risk gambler's ruin.

As a result of the above, and because they are part of the change-process nature of reality, "spontaneous order" processes -- including market processes -- are viewed as "disruptive" and "destabilizing" by some, particularly those with hierarchical tendencies, and this causes problems we'll run into beginning in Chapter wn, "Why NOT To Trade?" Finally we noted that despite these perceptions, there are great advantages to the "spontaneous order" type of decentralization, well illustrated by the decentralized slime mold's 99% advantage, the 9-11 studies, and the 6 to 1 edge of markets over central planning implied by OODA analysis of free-market drug sellers -- all based on the advantages of local behavior based on local conditions. This is more sensible and realistic than central control. As Proudhon correctly observed, "Liberty is the mother not the daughter of order."


NOTES:

[1] When humans play information games, the games become much more subtle, exotic, and convoluted. They come to involve not necessarily amplifying information or directly passing it around, but because they're roots lie in overt competition rather than in dealing with physical reality directly, they tend to become hidden and almost purely memetic -- what you think the other guy is thinking -- and how you think that may effect reality. This is particularly true in games where players don't want their information to propagate or only to be indirectly amplified, usually in the form of more money. This applies to games such as "poker" and economic games such as the stockmarket, etc. -- in fact, in "markets" of all kinds, as we'll particularly see beginning in Chapter wn, Why NOT To Trade. These can be all studied under the rubric of "games theory." return

[2]

Administer the empire by engaging in no activity.

The more taboos and prohibitions there are in the world,
The poorer the people will be.
The more laws and orders are made prominent,
The more thieves and robbers there will be.
Therefore, the sage says:
I take no action and the people of themselves are transformed.
I engage in no activity and the people of themselves become prosperous.
--Tao Te Ching (the Lao Tzu), 57, in W.-T. Chan, A Source Book in Chinese Philosophy (Princeton, N.J.: Princeton University Press, 1963), pp. 166-67. return
[3] Recall the difficulty our urban literate observers, steeped in hierarchical thinking, had attempting to understand slime mold and our acephalous ancestral-sized groups. And those Kremlin officials looking for America's "secret control center." return

[4] In fact, that's the underlying reason we may be severely upsetting that evolved "ecological order" we described above. return

[5] Actually, "memetic evolution" and "closed systems" are really just special cases of "unperceived precursor processes." In the case of memetic evolution, you'd have to be privy to everyone's thought processes in order to see those precursors, and clearly, those "outside the box" events are events you didn't pay attention to -- so you missed the precursors (assuming there were some). return

[6] If you search the web for "sources of unpredictability" you may still find a related discussion but aimed at unpredictability in particle physics. Particularly interesting are Murray Gell-Mann's thoughts and observations. return

[7] "Macroeconmic forecasts" only play a central role in fiat currencies where central "authorities" can theoretically control the money supply and thus must attempt to maintain a certain level of inflation. You can see an enlightening discussion of FED forecasting, particularly of inflation -- and now days, how it mainly depends on what people expect -- from a talk given by Federal Reserve Chairman Ben Bernanke, July 10, 2007, here: Inflation Expectations and Inflation Forecasting return

[8] However, the best way to predict the future is to create the future. That's the sound byte that describes the studies of cybernetics. That is, steering -- rather than straight kinematics and/or dynamics -- is necessary to reach goals under changing circumstances -- which is the rule, not the exception. return

[9] It's a quirk of British tradition to drive on the left-hand side of the road. Or, perhaps, from the British perspective, it's a quirk that others drive on the right-hand side. While standardization often makes sense, not as often as you might think -- and voluntary processes have the advantage of evolving that standard by that massively parallel trial and error process that regularly leads to well tested solutions -- and includes the possibility of changing them when necessary. return

[10] Hierarchies, because they inherently require "chains of command" include an OODA Loop or "Boyd cycle" delay as information passes up the chain of command and orders pass back down. We'll take a much closer look at this disadvantage in Chapter ww, What's Wrong With Hierarchy? Part II. return

[11] These days, central control implies "stability" which feeling we need because most of us lack the gambling (risk-taking) skill-set which our ancestors took for granted: In 1857, 73% of Americans had an independent source of income (Gatto) just after WWII, 45% did. Now, 2007, it's just 11%. return

[12] In 2007, however, the U.S. Government, in cahoots with the Ethiopian government, invaded Somalia after failing to install a puppet government by other subversive means. As of this writing (July 16, 2007 A.D.) the outcome is uncertain, but the results and misery caused thus far has been described as one of the worst humanitarian disasters of the year. return

[13] Think globally act globally is the anthesis. Federal Reserve Chair Alan Greenspan often remarks nostalgically about "the old days" when there were variable interest rates based on local conditions rather than one uniform interest rate imposed all across the country by The Federal Reserve. "Local bankers are certain to know more about local risk than we do," he says. The ultimate stupidity in global-think is well demonstrated by the New Jersey law requiring that every town have an elevator inspector -- even towns without any elevators. return


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