Political-Economy and Inflation

Paul Krugman devoted his column two weeks ago to the conduct of economic punditry as if the economy were a nineteenth century morality play: sermons about “debasing” the currency, longings for gold, fretting over inflation at the nadir of an economic crisis, a masochistic enthusiasm for “belt tightening” (“Misguided Monetary Mentalities,” The New York Times, 12 October 2009, p. A23). Taking off from this, Matthew Yglesias makes the point about the degree that class-parochial interests play in purportedly objective economic analysis (“The Monetary Hawks,” ThinkProgress, 12 October 2009):

… I would suggest that divergent analysis is in part driven by things that have relatively little to do with analysis. … if we have four or five years of near-zero inflation and 9-10 percent unemployment that will be fine for prosperous middle aged people and devastating to the interests of the poor and the young. Conversely, if we have four or five years of modest unemployment with four or five percent inflation, that will be fine for young people and poor people but potentially detrimental to the interests of wealthy people sitting on large piles of savings. Ultimately, I don’t think it helps the progressive cause to ignore the class / ideological elements to this dispute and just pretend to be engaging in a neutral technocratic dispute about the correct application of the Taylor Rule. What we’re talking about, after all, is decision-making under conditions of moderate uncertainty. What the hawks are proposing to do is to implement a policy that’s extremely attentive to minimizing downside risk to the currently wealthy whereas Krugman is proposing a policy that’s [attentive] to minimizing downside risk for people with below-average labor market prospects.

The problem is that we’ve adopted a manner of speaking about economic issues denuded of any mention of interest. The language of popular economics today is categorical: a strong dollar is good, a week dollar is bad; stable prices are good, inflation is bad; low unemployment is good, high unemployment is bad; rising house prices are good, stagnating or falling house prices are bad; et cetera. But none of these factors are categorically good or bad (few things in life are). What is omitted is the “for whom” of these characterizations of good and bad. Low employment may be good for job seekers, but high unemployment is good for employers: they have their pick of workers when hiring and they hold the majority of the bargaining power in wage negotiations. A strong dollar may be good for Wal Mart and their customers, but it’s bad for General Motors and their employees.

Real estate maintains some knowledge of contraposition with their talk of a buyers’ market versus a sellers’ market. We do not speak with a similar respect to the value of the dollar: of an investors’ dollar (strong) versus a producers’ dollar (weak) or an importers’ dollar (strong) versus an exporters’ dollar (weak). Or in employment, some people might think getting a raise or ease in finding a job are good, but these are what someone else might call labor price inflation (bad).

Economics isn’t free of the language of interest per se, so much as of one particular set of interests. The propaganda victory of the economic interests of Wall Street, the investing class, large business is so complete that their economic preferences have become de facto the whole language of economics. The awareness of the interests of all other economic actors has been totally expunged from the language of economics — well, not totally: there is the disciplinary ghetto referred to as heterodox economics, an exception that proves the rule.

To have asserted control over the linguistic territory is to have banished the political dispute; to have disappeared from the lexicon is to have ceded political legitimacy. Disputes over the political mixture of the interests of one economic class versus those of another are no longer about one set of economic relations versus another, but now take place in the frame of a rational economic order versus chaos, unreason and decline.

A firm separation between economics in its positivist, scientific role and economics in its normative, polemical and political role should be vigorously policed. Or perhaps economics is simply to value-laden, too embedded in the hurly-burley of human affairs for such a division to be tenable. Perhaps we should dispense with the notion of economics as a hard science in favor of a thoroughgoing political-economy. Even if we admit the possibility of a purely positivist economics, all that economics can do in our political deliberations is serve as a speculative tallyman of the opportunity costs of various policy options. The primacy of politics should come to the fore whenever economics crosses over from the academy to the public realm.

Target values for economic factors represent a political compromise between contending societal factions. The most well known of these is the NAIRU, the trade-off between inflation and unemployment codified in the statutory guidance of most of the world’s central banks. But inflation isn’t an unqualified evil. Its primary evils are that it has a tendency to run-away and, related, that it breeds uncertainty (a certain anticipatable regularity to the future is necessary to the function of capitalism). It used to be well known amidst the working (and indebted) classes that a certain amount of inflation served their interest and that “sound money” was merely the rallying cry of the investor class. The class conflict of easy versus sound money used to be a significant fault line separating progressive from conservative, populist from whig. Hence the advocacy of arch-populist William Jennings Bryan of an inflationary policy of bimetallism or “free silver” in the election of 1896.

There’s talk today about how vile it would be for the government to attempt to inflate away its debt (“debasing the currency” they call it), but the government doesn’t only inflate away its debt, it inflates away all dollar-denominated debts. A couple of years of higher than target inflation might be good for a country that has seen twenty years of galloping gains for the investor class, but racked up unsustainable amounts of debt among the middle and working classes. The investing class would scream bloody murder, but not because 3-5% inflation would be the end of economic reality as we know it, but because it would be a wealth transfer from creditor to debtor.

Fractals: It’s What’s for Dinner

Romanesco broccoli from the Mt. Pleasant farmers' market, Washington, D.C., 10 October 2009

Ever since I read that romanesco broccoli was a fractal I’ve been on the lookout for it. It finally turned up along with all the varieties of cauliflower at the Mt. Pleasant farmer’s market, so I snatched it up and tonight I broke that fractal down into-a little-a tiny cubes and fried it in olive oil, salt and pepper and white wine.

(My picture is nowhere as cool as this New York Times picture of the day from 7 October 2009)

Singulitarian Panic Goes Mainstream

Last week both the New York Times and New Scientist featured articles seriously speculating about the danger posed to humans by intelligent, belligerent robots. This week The Telegraph follows suite (Markoff, John, “Scientists Worry Machines May Outsmart Man,” The New York Times, 26 July 2009, p. A1; Campbell, MacGregor, “Artificial Intelligence Researchers Confront Sci-Fi Scenarios,” New Scientist, 29 July 2009; “Military Killer Robots ‘Could Endanger Civilians’,” The Telegraph, 3 August 2009). Also this week, an older story made the rounds about a Swedish company that was fined 25,000 kronor ($3,000) after a malfunctioning robot lashed out and nearly killed a maintenance worker (“Robot Attacked Swedish Factory Worker,” The Local, 28 April 2009). The prosecutor stated that, “I’ve never heard of a robot attacking somebody like this,” but as Matthew Yglesias points out, it’s not just the proletariat that’s under attack: Japanese Prime Minister Junichiro Koizumi was attacked by a robot in 2005 (“Robot Attacks Aren’t Just for Comedy, ThinkProgress, 29 July 2009; “Robot Attacks Japanese Prime Minister,” we make money not art, 21 August 2005). Finally, not only do we fret and fantasize over disaster, we make satire of it as well, as in this extreme anti-smoking video (Woerner, Meredith, “Smoking: It’s Only Enabling The Machines,” io9, 3 August 2009).

That’s a lot of fretting over robots for one week. Even 25 years after The Terminator (IMDB | Wikipedia), the robot apocalypse has remained a pretty geeky fantasy / disaster, but I would say that it’s approaching NBC (nuclear, biological, chemical) / CERN accidentally creating a mini-black hole level consciousness as a destroyer of humanity. Now if we could just gin up a little more fear over nanotech / grey goo / ecophagy / ice-9.

Kurzweil Will Die

Apropos the latest Terminator film, The New York Times has a decent rundown of singularitarianism, transhumanism, A.I. and so on that touches on most of the figures in the field (Markoff, John, “The Coming Superbrain,” 24 May 2009). The conclusion:

Kurzweil will probably die, along with the rest of us not too long before the ‘great dawn,'” said Gary Bradski, a Silicon Valley roboticist. “Life’s not fair.”

Moses never gets to enter the Promised Land. Such a shame — to be the last generation to die.

Machine Ethics

Two great new books on the future of robots, Moral Machines: Teaching Robots Right from Wrong and Wired for War: The Robotics Revolution and Conflict in the 21st Century are out right now. I’m not going to have time for either, but in the meantime, the New York Times constantly runs articles on this subject, most recently “A Soldier, Taking Orders From Its Ethical Judgment Center” (Dean, Cornelia, 25 November 2008, p. D1). To the list of all the things that robots will be better at than humans, we can add that they will be more ethical than us:

“My research hypothesis is that intelligent robots can behave more ethically in the battlefield than humans currently can,” said Ronald C. Arkin, a computer scientist at Georgia Tech, who is designing software for battlefield robots under contract with the Army.

In a report to the Army last year, Dr. Arkin described some of the potential benefits of autonomous fighting robots. For one thing, they can be designed without an instinct for self-preservation and, as a result, no tendency to lash out in fear. They can be built without anger or recklessness, Dr. Arkin wrote, and they can be made invulnerable to what he called “the psychological problem of ‘scenario fulfillment,’ ” which causes people to absorb new information more easily if it agrees with their pre-existing ideas.

His report drew on a 2006 survey by the surgeon general of the Army, which found that fewer than half of soldiers and marines serving in Iraq said that noncombatants should be treated with dignity and respect, and 17 percent said all civilians should be treated as insurgents. More than one-third said torture was acceptable under some conditions, and fewer than half said they would report a colleague for unethical battlefield behavior.

Troops who were stressed, angry, anxious or mourning lost colleagues or who had handled dead bodies were more likely to say they had mistreated civilian noncombatants, the survey said [Mental Health Advisory Team IV, FINAL REPORT, Office of the Surgeon General, United States Army Medical Command, 17 November 2006].

It is incorrect to imagine machines as behaving more ethically than humans insofar as it construes humans and machines as occupying the same ethical continuum. We may program machines to have human-compatible ethics, but that shouldn’t confuse us; the same ethical prohibitions that apply to us will not apply to robots.

Right and wrong aren’t something floating out there on the other side of the sphere of the stars. Right and wrong are derived from the characteristics of the human body, human tastes and tendencies as endowed in us by our natural history, the structure of the human lifecycle, our conceptions of the good life, shared human experience, and communal mythos. Creatures for whom these factors are different will have different ideas about right and wrong. As the last three items on the list — conceptions of the good life and shared experience, public reference symbols — differ among people, we have different ideas about right and wrong. A creature with a transferable consciousness won’t have an essentialist view of the relation of body to self and hence won’t take moral exception to bodily damage. A creature with a polymorphous consciousness wouldn’t disparage even psychic damage (though the question of identity for such a creature would be even more difficult than it is with us, as already elusive as we are).

Creatures with different conceptions interacting have to develop ethical interfaces. The minimalist limitations of rights-based liberalism and the law of nations are to some extent that: interfaces between differing moral systems — the former an interface for people within a society, the latter between different societies. What an interface between different species, or an interface between different types of life, would look like, I have no idea. Whether such an interface is even possible is perhaps more pressing: they only seem to hold up so well amidst humans.

Neil Sinhababu, “the Ethical Werewolf,” and Ramesh Ponnuru had a go-round back in 2006 that touched on the ethical status of non-human creatures, but I don’t think it really goes beyond the natural extension of liberalism to different physical morphologies, with which liberalism has an extensive history in the various rights movements. And different physical morphologies is all that aliens and other mythological creatures, as conventionally conceived, are (Sinhababu, Neil, “Mind Matters,” The American Prospect, 23 August 2006; Ponnuru, Ramesh, “Fear Not, Frodo,” National Review Online, 28 August 2006; Sinhababu, Neil, “More on Minds,” TAPPED, 30 August 2006).

Presidential Restraint and Congress

As a part of my Whig Liberalism, I believe that Congressional supremacy is part of the Constitutional design of our system and I consider Andrew Jackson a villain of history and good governance insofar as he was able to go farther than any other president to reverse this proper ordering. The array of images, gestures and protocols that presidents have at their disposal to reify this Constitution-turned-upside-down version of tripartite government is myriad.

Among them, and one that constantly annoys me, is the protocol of congress-president relations. The president deigns to speak to Congress once a year, and then only as a pretext for a television spot; the president is never required to submit to Congressional questioning; when the president wants to influence Congress, he stays put at 1600 and sends some flunkey down Pennsylvania Avenue; but when Congress wants to deal with the president, not just some charging, but the members themselves go, and then not some junior Representative, but only the highest ranking members are allowed to participate. It sends a clear signal of executive supremacy and Congressional supplicancy. The king keeps his court. Presidential aloofness is a show of presidential authority.

I have been impressed with President Obama’s first week in office. On Wednesday he suspended military tribunals; on Thursday he ordered the closing of the Guantánamo Bay detention camp, acts of confidence in the U.S. judicial system to handle these issues and a surrendering by the executive of the power of judgment and justice to its proper place in the Constitutional order. One branch accuses, another adjudicates: that is the division of powers. Also on Wednesday he ordered full compliance with the Freedom of Information Act and rescinded former President Bush’s order allowing the executive branch to resist normal declassification of presidential records. (Glaberson, William, “Obama Orders Halt to Prosecutions at Guantánamo,” The New York Times, 21 January 2009; Mazzetti, Mark , “Obama Issues Directive to Shut Down Guantánamo,” The New York Times, 22 January 2009, p. A1; Stolberg, Sheryl Gay, “On First Day, Obama Quickly Sets a New Tone,” The New York Times, 22 January 2009, p. A1)

But of the things that have impressed me so far, none has done so much as his visit to Congress today to meet with the Republican caucus to explain, to answer questions and to advocate for the administration’s stimulus plan (Zeleny, Jeff, “Obama Visits Capitol to Press Republicans on Stimulus Plan,” The New York Times, 27 January 2009). This is how a president should behave toward Congress: as a co-equal branch.

I fear that Congressional Republicans plan on dealing the Obama administration a souring lesson on partisan intransigence in Washington, D.C. and that the administration will revert to presidential maximalism, but I hope (there’s that word again) that this is the start of a presidency of true consultation and of executive restraint. Such an example would be an accomplishment of its own.

The Napoleon Dynamite Problem

After casing Ben Goertzel’s blog today, the point that I find myself really chewing on is this one (“The Increasing Value of Peculiar Intelligence,” The Multiverse According to Ben, 26 November 2008):

What occurs to me is that in a transparent society, there is massive economic value attached to peculiar intelligence. This is because if everyone can see everything else, the best way to gain advantage is to have something that nobody can understand even if they see it. And it’s quite possible that, even if they know that’s your explicit strategy, others can’t really do anything to thwart it.

Yes, a transparent society could decide to outlaw inscrutability. But this would have terrible consequences, because nearly all radical advances are initially inscrutable. Inscrutability is dangerous. But it’s also, almost by definition, the only path to radical growth.

I argued in a recent blog post [“The Inevitable Increase of Irrationality,” 25 November 2008] that part of the cause of the recent financial crisis is the development of financial instruments so complex that they are inscrutable to nearly everyone — so that even if banks play by the rules and operate transparently, they can still trick shareholders (and journalists) because these people can’t understand what they see!

But it seems that this recent issue with banks is just a preliminary glimmering of what’s to come.

Inscrutability, peculiarity, the idiosyncratic are already creeping in. Mr. Goertze is right to point to the rise of the quants and mathematical finance as an example. The one that comes to mind for me is the Napoleon Dynamite problem.

NetFlix has announced a million dollar prize for anyone who can improve the precision of its recommendation engine by ten percent. The New York Times Magazine and NPR’s On the Media both did stories about it back in November (Thompson, Clive, “If You Liked This, You’re Sure to Love That,” 23 November 2008; Gladstone, Brooke, “Knowing Me, Knowing You,” 21 November 2008). It turns out that improving the quality of this sort of singular value decomposition algorithm is geometric in difficulty. Most movies are easy to predict whether someone will like or dislike them, but a small number of odd movies thwart the algorithm. Chief among them is Napoleon Dynamite. For the research group profiled in The New York Times piece, Napoleon Dynamite was responsible for a whopping fifteen percent of all recommendation errors. There is no telling on the basis of people’s past movie rating history whether or not they’ll like this movie.

But the Napoleon Dynamite problem isn’t a solitary anomaly, but rather the paradigm of a trend. What we have is a Hollywood focused on these monster, expensive productions. Increasingly the movies that Hollywood makes are global products, with as much revenue coming from abroad as from the U.S. audience, so Hollywood is careful to strip its movies of any dialogue, humor or situations which are culturally nuanced and might not translate well. So the plot and dialog that we get in big Hollywood movies today is only the most broadly recognized and basic cultural tropes. Also, Hollywood has jacked the price of a movie up to the point where viewers now almost universally make a theatre-rental division: big special effects movies that they want to see in the theatres, and the dramas for which screen size isn’t a factor. It is a division with a positive feedback loop in that movie makers are aware of it and now shape their product offerings around it.

For a particularly depressing take on this, give a listen to Malcolm Gladwell’s 2006 New Yorker Festival talk on the use of machines to produce blockbuster scripts. At the same time that institutions like NetFlix are using computers to match customers to movies with increasing efficiency on the consumer end, Hollywood is using computers to make films increasingly easy to pigeonhole and match to demographics on the production side. It’s post-Fordist cultural production perfected. Soon we will be able to take the human out of the equation and the entertainment industry will just garnish out wages.

But there is — as is always the case — a countervailing motion. Just as Hollywood productions become increasingly trite and formulaic, there is the rise of these wildly bizarre and idiosyncratic films like The Zero Effect, Adaptation, Eternal Sunshine of the Spotless Mind, Lost in Translation, The Royal Tenenbaums, I Huckabees, Burn After Reading and so on. There is this sort of shadow Hollywood with it’s own set of stars and directors branding the alt-film genera: Wes Anderson, Charlie Kaufman, the Coen brothers, Catherine Keener, John Malkovich, William H. Macy, Frances McDormand. I would be remiss if I didn’t mention Steve Buscemi here.

What we have is a hollowing out of the middle. Along a spectrum, films range from obscurantia to formulaic. In the past, most movies probably fell in some broad middle: accessible, but unique. And most movie watchers probably fell there too. But increasingly movies and the movie-watching audience is being polarized into the genera constellations at one end and the difficult to categorize peculiarities at the other. Notice that the ambiguity of suspense has been replaced by the spectacle of gore in horror; that the sort of romantic comedy for which Drew Barrymore was designed and built has completely driven the older adult romantic drama to extinction. Similarly, the sort of accessible quirky, artiness represented by Woody Allen has moved much further down the spectrum of the idiosyncratic. The people who didn’t like Woody Allen are utterly baffled by Wes Anderson.

To generalize: hitherto we have been a normal distribution society. The majority of people fall into the broad middle and are closely related. But increasingly we are on the way toward a parabolic, or inverse normal distribution society, where the preponderance resides at the antipodes and people are separated by wide gulfs. This is true across the cultural spectrum, whether it’s politics, religion, the professions and so on. In the United States it is almost happening physically with the costal regions swelling as the center of the country is abandoned to satellite guided tractors and migrant labor. Some might call this the condition of postmodernity, some might call it the dissolution of Western Civilization.

American Ecumenicalist Pluralism

Charles Blow tells an amusing story about the essential ecumenicalist pluralism of the United States (“Heaven for the Godless?,” The New York Times, 26 December 2008, p. A25):

In June, the Pew Forum on Religion and Public Life published a controversial survey in which 70 percent of Americans said that they believed religions other than theirs could lead to eternal life.

This threw evangelicals into a tizzy. After all, the Bible makes it clear that heaven is a velvet-roped V.I.P. area reserved for Christians. Jesus said so: “I am the way, the truth and the life: no man cometh unto the Father, but by me.” But the survey suggested that Americans just weren’t buying that.

The evangelicals complained that people must not have understood the question. The respondents couldn’t actually believe what they were saying, could they?

So in August, Pew asked the question again. (They released the results last week.) Sixty-five percent of respondents said — again — that other religions could lead to eternal life. But this time, to clear up any confusion, Pew asked them to specify which religions. The respondents essentially said all of them.

And they didn’t stop there. Nearly half also thought that atheists could go to heaven — dragged there kicking and screaming, no doubt — and most thought that people with no religious faith also could go.

The full study results are here (“Many Americans Say Other Faiths Can Lead to Eternal Life,” 18 December 2008).

I suggest that this means that Americans are essentially communitarian, consequentialist and anti-foundationalist in their moral outlook.

For the fundamentalist religious person, right belief about metaphysical and factual matters is paramount and right behavior secondary. Right belief is often seen as being of such a higher order of importance that it alone is sufficient and gross moral deviance on the part of the righteous is perfectly acceptable, hence modern day religious fanaticist terrorism. But for most Americans it is the reverse. The conception of the good is primary and they bend the rest of their beliefs around this. The particular beliefs that lead to the right behavior aren’t all that important, just so long as the result is someone who is a good person. (I think here of Aristotle’s suggestion in the Nicomachean Ethics that for he who has “been brought up in good habits … the fact is a starting point, and if this is sufficiently plain to him, he will not need the reason as well; and the man who has been well brought up has or can easily get starting-points.” §1095b)

But if Americans don’t believe that right and wrong consist in adherence to a particular book of maxims, then where do they think they come from?

People decide right and wrong prior to religion — at least logically prior, if not chronologically prior. Most people think religion an okay source of moral instruction for children, but eventually attain a level of ethical sophistication where they use their own standard of right and wrong to judge religious teaching, rather than vice-a-versa. It’s Daniel Dennett’s point that many more people believe in belief than actually believe. Chronologically, I imagine people probably go through something like Kierkegaard’s three phases of the slave, the knight of infinite resignation, and the knight of faith. People develop an idea of good from their upbringing, a host of stories in the culture, their moral exemplars, their conception of their own life, their own moral experimentation and so on. Moral discourse is an equal opportunity endeavor. Armed with that, they recognize fellow good people based on an intersubjective or commonly held standard — differing one person to another, but demonstrating “family resemblance.”

The Christian right attempts to bolster the case for its monolithic policy preferences by arguing that the United States is a Christian nation, that it’s becoming more religious or that religion is essential for morality. To the degree that any of these are true, it’s not in a way that helps the case of the right. Americans are essentially pluralist, tolerant, even polyglot, pragmatic and not particularly concerned with the finer points of principle — exactly what one would expect from a real liberal democratic polity.

OneMachine Doppelganger

Kevin Kelly has long discussed the OneMachine: the essentially unified, single distributed computer built up from all our networked PCs, PDAs, cell phones, digital cameras and other personal electronics (see e.g. “Tap Into the 12-Million-Teraflop Handheld Megacomputer,” Wired, vol. 16, no. 7, June 2008; “Dimensions of the One Machine,” The Technium, 2 November 2007; “One Huge Computer,” Wired, vol. 6, no. 8, August 1998).

Last week The New York Times ran an article on how below the surface, and running on the very same computers as the productive, life-enhancing OneMachine is a nefarious parallel network, OneMachine’s dark doppelganger, the BotNet (Markoff, John, “A Robot Network Seeks to Enlist Your Computer,” 20 October 2008, p. B1):

Botnets remain an Internet scourge. Active zombie networks created by a growing criminal underground peaked last month at more than half a million computers, according to shadowserver.org, an organization that tracks botnets. Even though security experts have diminished the botnets to about 300,000 computers, that is still twice the number detected a year ago.

The actual numbers may be far larger; Microsoft investigators, who say they are tracking about 1,000 botnets at any given time, say the largest network still controls several million PCs.

“The mean time to infection is less than five minutes,” said Richie Lai, who is part of Microsoft’s Internet Safety Enforcement Team, a group of about 20 researchers and investigators. The team is tackling a menace that in the last five years has grown from a computer hacker pastime to a dark business that is threatening the commercial viability of the Internet.

I have already written about how when the singularity occurs, it may not be what we expect. My suspicion is that either it will be overtly evil, or merely a recreation of the chaos of biological nature in a more durable, powerful and virulent form (“A Few Heretical Thoughts on the Singularity,” 19 August 2008).

What do phenomena like the BotNet suggest about the singularity? What comes will grow out of what is and what is will bequeath its characteristics to what comes — at least initially. Between the various military establishments and the criminal underground, we are instilling our machines with hostile, aggressive tendencies. But we are also making numerous, competitive systems. Will there be “the singularity” or will it, like in the novels of Vernor Vinge and Charles Stross, come in secretive, uncertain fits and starts? Will there be multiple singularities? Will one system cross the threshold, followed by another, then another. It makes sense to speak of “the singularity” when one is imagining a unified system, but when one is considering a multitude of contending systems, crossing the threshold of the singularity is but one move in a strategic game. Perhaps the machines will be hostile to predecessor biological life, but perhaps they will be so consumed in competition with their fellow AIs as to be merely indifferent to us, as we are to, say, pigeons or squirrels.

And how goes the strategic competition between OneMachine and BotNet? We ought to know. What portion of computational capacity, bandwidth, energy consumption, hours of their masters’ time are the two consuming? Qualitatively, how are they matching capabilities? Kevin Kelly has managed to make some calculations for the former, but what of the latter? Of course this would subject to the usual problems of surveillance of those who do not want to be surveyed.

Organizations like McAffee, Norton and the International Botnet Taskforce are attempting to build something akin to an immune system for the Internet, but the billion-year persistence of the arms race between host immune systems and the various infectious agents suggests that dampening catastrophe is probably the best outcome we can hope for. It’s an example of co-evolution where competition between host and agent drives the development of one another. Viruses don’t kill their host by design, they merely seek to hijack their reproductive machinery to their own purposes. Killing the host, or at least killing them too quickly, or the epiphenomenon of killing too many of them too quickly, are all suboptimum in that they result in diminished opportunity for continued infection and reproduction. Ebola gets it wrong. HIV gets it really right. But virus behavior as a whole is not intelligent. Occasionally a virus goes super virulent or hits a particularly vulnerable population and massive outbreak occurs that wrecks havoc for host and infectious agent alike. I presume that BotNets will continue to act something like this.

And since one third of known biological species are parasites and the proportion seems to be growing, it would seem that there is something fundamental about the strategy of parasitism. We should anticipate its continuance, both in genetic and electronic space.

The Perspective of the World, 2008

The recent, dramatic drops in the Dow Jones Industrial Average command attention, but they are foam. The real currents of the current crisis are mostly hidden from public view. Some journalists are burning a lot of shoe leather to bring that story to light, but I imagine that much of it will remain obscured from history to all but the actors themselves.

And so Fernand Braudel in Civilization and Capitalism, 15th-18th Century, Volume I: The Structures of Everyday Life: The Limits of the Possible (trans. Siân Reynolds, New York: Harper & Row Publishers, 1981):

On the other hand, looking up instead of down from the vast plane of the market economy, one finds that active social hierarchies were constructed on top of it: they could manipulate exchange to their advantage and disturb the established order. In their desire to do so — which was not always consciously expressed — they created anomalies, ‘zones of turbulence’ and conducted their affairs in a very individual way. At this exalted level, a few wealthy merchants in eighteenth-century Amsterdam or sixteenth-century Genoa could throw whole sectors of the European or even world economy into confusion, from a distance. Certain groups of privileged actors were engaged in circuits and calculations that ordinary people knew nothing of. Foreign exchange for example, which was tied to distant trade movements and to the complicated arrangements for credit, was a sophisticated art, open only to a few initiates at most. To me, this second shadowy zone, hovering above the sunlit world of the market economy and constituting its upper limit so to speak, represents the favored domain of capitalism, as we shall see. Without this zone, capitalism is unthinkable: this is where it takes up residence and prospers. (p. 24)

The New York Times last Thursday (Nocera, Joe, et. al., “As Credit Crisis Spiraled, Alarm Led to Action,” 2 October 2008, p. A1):

This is what a credit crisis looks like. It’s not like a stock market crisis, where the scary plunge of stocks is obvious to all. The credit crisis has played out in places most people can’t see. It’s banks refusing to lend to other banks — even though that is one of the most essential functions of the banking system. It’s a loss of confidence in seemingly healthy institutions like Morgan Stanley and Goldman — both of which reported profits even as the pressure was mounting. It is panicked hedge funds pulling out cash. It is frightened investors protecting themselves by buying credit-default swaps — a financial insurance policy against potential bankruptcy — at prices 30 times what they normally would pay.

It was this 36-hour period two weeks ago — from the morning of Wednesday, Sept. 17, to the afternoon of Thursday, Sept. 18 — that spooked policy makers by opening fissures in the worldwide financial system.

Anomalies, zones of turbulence, fissures: call them what you will.