The "free market" doesn't exist because the economy is governed by rules established by governments and rules between governments in extension.
Cryptocurrencies right now are a speculative trading tool and store of value for others (very volatile at that), but I think that the cryptocurrencies that will really take off and seep into the mainstream are the government digital currencies currently being worked on (China is set to start testing the digital Yuan soon if not already).
My point is that nothing is ever truly free because nothing is ever by itself in a vacuum. You have to interact with outside forces and follow certain rules - natural or otherwise.
The cryptocurrencies that will really take off (in the long run) will be the ones that are most programmable and win the most developer hearts and minds. Digital nation-state sponsored fiat won't be able to compete with the complexity that is made possible by "finance legos". I think Ethereum and maybe what's coming together at https://www.avalabs.org/ are good examples.
See "Central Bank Digital Currency" report and details by an actual central bank in the Eurozone[1]. "Cash is no longer king" and this indeed could go mainstream. But it is far far away from self-organisations. Finance (like aviation) is quite a regulated industry.
I’ll be that guy to point out that bees have a queen.
But more seriously, imo, it is an error to conflate permanent organizational perches of top-down systems (“leader”) with command and control networks and ‘critical nodes’.
In context of considering bottom-up, self-organizing system, it is important to note that order increases, and ‘organization’ is a neutral term. Critical nodes may (temporarily) emerge.
There is also nothing fundamental in the bottom-up organization process that inherently precludes the emergence of a hierarchy.
I've always viewed the entire colony as the "thinker".
It is true that the queen is not the "brain" but then neither is the individual worker bee. Considered as a cellular automata, the queen 'cell' is a super-cell. The queen regulates flow of pheromones, and communication is communication, whether it uses electric signals or gradient diffusion of chemicals. That 'cell' is sitting on top of a hierarchy, and whether she is just a glorified "gland" as you would have it or not, little worker bees will NOT disregard her input.
FWIW it's not like we disregard the, uh, input of our gonads, eh?
Anyway, I basically agree with you, except that I doubt the queen is doing much more, uh, thinking than any particular worker. I don't think she's more of a person (independent mind) than a worker.
It's very simple: there is a hierarchy in a hive. And yes, on occasion I surprise myself, to say nothing of my demanding gonad, and veto hormonal urges.
The topic at hand, my original remark above, is that self-organization does not speak to the necessity of leaders, and hierarchical organizational order.
> The queen is very directed and regimented in everything she does, from her mating flight to her regular, consistent egg-laying prowess. Given her central role and even her name, it is understandable that the layman assumes the queen to be a decision-maker, of sorts. This is not the case at all.
> She is the star of the hive, because of her egg-laying abilities, but is controlled by an overall puppet master – the collection of worker bees.
I think the boids analogy works better if the "small green pieces of paper" are the agents. Their tendency to cluster may then explain winner takes all accumulation. Survival strategies in tension with predation from taxes, fraud, rent seeking.
--
“This planet has - or rather had - a problem, which was this: most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movement of small green pieces of paper, which was odd because on the whole it wasn't the small green pieces of paper that were unhappy.”
― Douglas Adams, The Hitchhiker's Guide to the Galaxy
>> Swarms need managers.
Let's call them agents :)
The invisible hand is quite visible nowadays and it's Protegé the shareholder doesn't help much with anything right now. And don't make me start with the Soviet union :)
Regarding linux.. I'd love to read some pro and contra arguments.
I've yet to see any human group larger than ~10ppl to self organize. We usually organize by leader picking/detection and delegation, coz we have trust issues.
Picking a nit, the article claims that a free market works only in equilibrium. This is a spherical cow in a vacuum view of economics.
Markets, in general, can be seen as moving toward an incalculable equilibrium (at least not calculable in less time than it takes to reach). There is not a single equilibrium, though. As time goes on, people are born and die, trends and preferences change. If you could calculate some optimal state as of the end of 2019 and name it as "equilibrium", that would be different than the optimal state as of the end of 2020 (and different (and likely without some continuous transition function) in the full duration between these points).
This is a good way to think about it. Certainly more helpful than many other short explanations I've seen attempted.
Am not economist, but do have econ degree.
Edit for slight clarification: The phrasing suffers from anthropomorphizing a thing. The market is a collection of human interactions. Humans are the agents. The market is an amalgamation of many individuals acting as they best see fit, utilizing their local knowledge. The sum of these actions and interactions performs the calculation.
Agreed. Equilibrium is defined in terms of the market, not the other way around. The system does what it does.
I think a better way of phrasing the article's point is that markets are metastable; pushed hard enough, they'll stop falling back to the current equilibrium and instead find a new one. That transition process often involves massive amounts of death and suffering, so that's why we care about not disturbing the market.
I'd push back on your use of "current equilibrium", based on how I interpret this phrase. If my interpretation is off, then I apologize.
It reads to me as if you're presenting the world as having a single equilibrium toward which the market moves. There is no meaningful static idea of equilibrium. However you want to define and measure some optimal state that we can call equilibrium, this target moves discontinuously at least with each birth and death that occurs. Each of these events either introduces or removes a set of preferences (a terrible reduction of humanity). Accounting for these will shift our "equilibrium" in any meaningful calculation of the same. There are 1.8 deaths per second and 4.3 births per second.[0][1]
Again, these birth and death rates represent the minimum rate of change of equilibrium. As a follow-on effect, a birth is very likely to alter the parents' preferences in a way that will shift the equilibrium. Deaths likely shift families' and friends' preferences in a way that will shift the equilibrium. Both these second-order effects are not instantaneous (information does not spread instantly). Invention and innovation represent changes. Discovery of new natural resources represent changes. And people are not static sets of preferences. People change.
Perhaps we may be able to define some equilibrium for an instant. And we can expect with near-certain probability that one instant's equilibrium is very close to neighboring instants' equilibria. But the shifts are discontinuous, and likely impossible to model with a function.
> It reads to me as if you're presenting the world as having a single equilibrium toward which the market moves.
The opposite. I hinted at that by saying "the system does what it does", though I realize it may be an obscure reference[0]. The markets are. They are a dynamic system that naturally reaches some sort of (meta)stable behavior, and this is what we call equilibrium. It's not defined, it's observed.
> this target moves discontinuously at least with each birth and death that occurs
Disagree. To a good approximation, markets moves continuously, because it takes time for individual preferences to manifest, and preferences aren't binary switches - they're communicated through many individual decisions over time.
WRT. the "death and suffering" part, I meant that large disruptions to markets usually involve events that kill and impoverish lots of people, and markets rebalancing themselves also cause that. I'm thinking of events like COVID-19, 2008, 1929, and quite often, discovery of new deposits of highly demanded resources.
Thanks for the clarification. I did not know that reference, and it seems we're much more in alignment than I thought.
I still hold that the target moves discontinuously, though not universally so. Death is the strongest argument here. A set of preferences exists, and then it doesn't. Some deaths are expected. Some are slow. Some are unexpected. Some are abrupt. Death is a binary off-switch for all preferences the deceased individual may have had. Without this collection of preferences, equilibrium abruptly jumps to some other value. Of course, in a system as large as the market, these death-jumps are going to be so small as to be effectively immeasurable.
Note: expectation of death here means at a specific time. All death is expected on a long enough time scale.
> To a good approximation, markets moves continuously
I agree here. My discussion of discontinuity, though, is that of movement of whatever ideal equilibrium the market is moving toward (but does not achieve). The equilibrium is the target toward which a market moves. This equilibrium is incalculable or at least not calculable in less time than it would take to reach. The target may move discontinuously (though I would argue the discontinuities are small for the most part), and the process moving toward the target may be continuous, both at the same time.
Ninja edit: An equilibrium in this discussion is more akin to a platonic ideal than anything concrete. The market is the system which can be observed. The equilibrium is an abstract and incalculable target.
In addition to bitcoion, mentioned in the OP, several crypto projects in the DAO space come to mind. What if you don't need managers, but strong contracts between individuals? I think that's one of the theses floating around in that space.
Bees, ants and termites are considered super organisms. As discussed, they don't really act as a great example of emergent behavior of organisms - more analogous to the organization of, say, cells within a mammalian body. Drawing the lines around species properly is helpful to understand the implications of natural selection, and the fitness functions surrounding emergent behavior.
Without doubt, eusocial insects represent some of the most successful species on the planet from a biomass perspective. At the same time, if you study the evolution of these species, you won't be motivated to "be a bee".
One way to describe the very complex multi-adaptation evolution in brief: wasp egg dumpers, over generations had the tables turned; host wasps started charging rent, then enslaving younger generations; some of the wasps started cloning their slaves, even breeding these clones for specialized roles.
26 comments
[ 4.2 ms ] story [ 76.0 ms ] threadThe "free market" doesn't exist because the economy is governed by rules established by governments and rules between governments in extension.
Cryptocurrencies right now are a speculative trading tool and store of value for others (very volatile at that), but I think that the cryptocurrencies that will really take off and seep into the mainstream are the government digital currencies currently being worked on (China is set to start testing the digital Yuan soon if not already).
My point is that nothing is ever truly free because nothing is ever by itself in a vacuum. You have to interact with outside forces and follow certain rules - natural or otherwise.
[1] https://www.dnb.nl/en/news/news-and-archive/dnbulletin-2020/...
But more seriously, imo, it is an error to conflate permanent organizational perches of top-down systems (“leader”) with command and control networks and ‘critical nodes’.
In context of considering bottom-up, self-organizing system, it is important to note that order increases, and ‘organization’ is a neutral term. Critical nodes may (temporarily) emerge.
There is also nothing fundamental in the bottom-up organization process that inherently precludes the emergence of a hierarchy.
The "queens" are gonad not brain.
It is true that the queen is not the "brain" but then neither is the individual worker bee. Considered as a cellular automata, the queen 'cell' is a super-cell. The queen regulates flow of pheromones, and communication is communication, whether it uses electric signals or gradient diffusion of chemicals. That 'cell' is sitting on top of a hierarchy, and whether she is just a glorified "gland" as you would have it or not, little worker bees will NOT disregard her input.
Anyway, I basically agree with you, except that I doubt the queen is doing much more, uh, thinking than any particular worker. I don't think she's more of a person (independent mind) than a worker.
The topic at hand, my original remark above, is that self-organization does not speak to the necessity of leaders, and hierarchical organizational order.
https://www.perfectbee.com/learn-about-bees/the-life-of-bees...
> She is the star of the hive, because of her egg-laying abilities, but is controlled by an overall puppet master – the collection of worker bees.
Right at the start of the article my friend...
--
“This planet has - or rather had - a problem, which was this: most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movement of small green pieces of paper, which was odd because on the whole it wasn't the small green pieces of paper that were unhappy.”
― Douglas Adams, The Hitchhiker's Guide to the Galaxy
The invisible hand is quite visible nowadays and it's Protegé the shareholder doesn't help much with anything right now. And don't make me start with the Soviet union :)
Regarding linux.. I'd love to read some pro and contra arguments. I've yet to see any human group larger than ~10ppl to self organize. We usually organize by leader picking/detection and delegation, coz we have trust issues.
Markets, in general, can be seen as moving toward an incalculable equilibrium (at least not calculable in less time than it takes to reach). There is not a single equilibrium, though. As time goes on, people are born and die, trends and preferences change. If you could calculate some optimal state as of the end of 2019 and name it as "equilibrium", that would be different than the optimal state as of the end of 2020 (and different (and likely without some continuous transition function) in the full duration between these points).
(But it could be a pretty falsehood: not an economist.)
Am not economist, but do have econ degree.
Edit for slight clarification: The phrasing suffers from anthropomorphizing a thing. The market is a collection of human interactions. Humans are the agents. The market is an amalgamation of many individuals acting as they best see fit, utilizing their local knowledge. The sum of these actions and interactions performs the calculation.
Same idea, just clarifying where agency exists.
I think a better way of phrasing the article's point is that markets are metastable; pushed hard enough, they'll stop falling back to the current equilibrium and instead find a new one. That transition process often involves massive amounts of death and suffering, so that's why we care about not disturbing the market.
It reads to me as if you're presenting the world as having a single equilibrium toward which the market moves. There is no meaningful static idea of equilibrium. However you want to define and measure some optimal state that we can call equilibrium, this target moves discontinuously at least with each birth and death that occurs. Each of these events either introduces or removes a set of preferences (a terrible reduction of humanity). Accounting for these will shift our "equilibrium" in any meaningful calculation of the same. There are 1.8 deaths per second and 4.3 births per second.[0][1]
Again, these birth and death rates represent the minimum rate of change of equilibrium. As a follow-on effect, a birth is very likely to alter the parents' preferences in a way that will shift the equilibrium. Deaths likely shift families' and friends' preferences in a way that will shift the equilibrium. Both these second-order effects are not instantaneous (information does not spread instantly). Invention and innovation represent changes. Discovery of new natural resources represent changes. And people are not static sets of preferences. People change.
Perhaps we may be able to define some equilibrium for an instant. And we can expect with near-certain probability that one instant's equilibrium is very close to neighboring instants' equilibria. But the shifts are discontinuous, and likely impossible to model with a function.
[0] https://www.medindia.net/patients/calculators/world-death-cl...
[1] https://www.theworldcounts.com/stories/How-Many-Babies-Are-B...
> It reads to me as if you're presenting the world as having a single equilibrium toward which the market moves.
The opposite. I hinted at that by saying "the system does what it does", though I realize it may be an obscure reference[0]. The markets are. They are a dynamic system that naturally reaches some sort of (meta)stable behavior, and this is what we call equilibrium. It's not defined, it's observed.
> this target moves discontinuously at least with each birth and death that occurs
Disagree. To a good approximation, markets moves continuously, because it takes time for individual preferences to manifest, and preferences aren't binary switches - they're communicated through many individual decisions over time.
WRT. the "death and suffering" part, I meant that large disruptions to markets usually involve events that kill and impoverish lots of people, and markets rebalancing themselves also cause that. I'm thinking of events like COVID-19, 2008, 1929, and quite often, discovery of new deposits of highly demanded resources.
--
[0] - https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...
I still hold that the target moves discontinuously, though not universally so. Death is the strongest argument here. A set of preferences exists, and then it doesn't. Some deaths are expected. Some are slow. Some are unexpected. Some are abrupt. Death is a binary off-switch for all preferences the deceased individual may have had. Without this collection of preferences, equilibrium abruptly jumps to some other value. Of course, in a system as large as the market, these death-jumps are going to be so small as to be effectively immeasurable.
Note: expectation of death here means at a specific time. All death is expected on a long enough time scale.
> To a good approximation, markets moves continuously
I agree here. My discussion of discontinuity, though, is that of movement of whatever ideal equilibrium the market is moving toward (but does not achieve). The equilibrium is the target toward which a market moves. This equilibrium is incalculable or at least not calculable in less time than it would take to reach. The target may move discontinuously (though I would argue the discontinuities are small for the most part), and the process moving toward the target may be continuous, both at the same time.
Ninja edit: An equilibrium in this discussion is more akin to a platonic ideal than anything concrete. The market is the system which can be observed. The equilibrium is an abstract and incalculable target.
https://colony.io/
https://medium.com/@simondlr/the-moloch-dao-collapsing-the-f...
Without doubt, eusocial insects represent some of the most successful species on the planet from a biomass perspective. At the same time, if you study the evolution of these species, you won't be motivated to "be a bee".
One way to describe the very complex multi-adaptation evolution in brief: wasp egg dumpers, over generations had the tables turned; host wasps started charging rent, then enslaving younger generations; some of the wasps started cloning their slaves, even breeding these clones for specialized roles.
Its a really interesting topic to dive into. https://en.wikipedia.org/wiki/Evolution_of_eusociality
http://csis.pace.edu/~marchese/CS396x/Computing/Ashby.pdf