After watching Chris Hedges’ interview with Sheldon Wolin, I desired to read Wolin’s books. Democracy Incorporated provided a creative perspective with which to interpret recent American political and social events. Upon completion, I had an urge to continue extracting the political ideas of Wolin and I concluded that the best way to do this would be to jump into the deep end and open his book, Politics and Vision. Not only do I now have incredible respect for his ideas but I also feel that he has broadened my personal awareness of my place in society and history. There are criticisms I have toward the content (exclusively focused on “European/American”), but they are rather minimal in scope compared to the benefits any reader would gain by reading it thoroughly. I would say that Politics and Vision, as time progresses, will turn out to be one of the most important books I have ever read.
Category: economics (Page 2 of 8)
The End of Certainty by Ilya Prigogine provides insight into the natural processes which give rise to the novelty of life. Despite being published in 1997, there are so many great quotes and concepts which are still applicable today, that I will just say, “Read the book!” It will also help to read Stuart Kauffman’s book, Investigations, either before or after reading Prigogine’s book. Approaching from a different angle, Kauffman explores biological processes of nature which give rise to novelty and creative adaptive structures. Both books talk heavily about the dynamics of equilibrium and entropy. In the words of Prigogine, on page 67, “…matter at equilibrium is ‘blind,’ but far from equilibrium it begins to ‘see.'” Thus, non-equilibrium systems can think and observe the world, whereas systems in equilibrium are ignorant of all outside processes.
The approach of Prigogine lies in understanding the importance of Poincaré Resonances on dynamics and the construction/destruction of correlations at the microscopic level. How these resonances and these correlations behave leads to macroscopic features and the breaking of time symmetry. He deals with solving these Large Poincare Systems outside of the Hilbert Space; this is a concept which is important to biology and human social sciences. Because in these fields, we are always dealing with a system (human beings) which is far from equilibrium and behaves in novel and creative ways.
In other words, life, as a non-equilibrium dissipative structure emerging from the non-living world, needs to be studied under the auspices of “The End of Certainty.” Irreversible processes and long range correlations are critical to understanding the development of self-organization and the novelty of life.
All social sciences deal with a biological organism (humans), which is a product of non-equilibrium processes. Even Prigogine and the book itself are correlated with the mass of knowledge produced by humanity in the 20th century. In other words, his ideas and those of all scientists are subject to the same non-equilibrium dynamics which Prigogine talks about in his book. Resonances and correlations in the social sphere can lead to amazing discoveries or a lack thereof.
One subject that I think could see development from Prigogine’s ideas is economics. Economics should be considered: “The study of non-equilibirum dissipative structures created by the self-organized social species known as homo sapiens, to reproduce and adapt in the biosphere called ‘Earth.'”
What I thought about the most was the concept of correlation creation and destruction. In terms of self-organizing systems and financial markets, perhaps crashes are correlation destruction events, while bubbles are correlations spreading through time. And after a crash occurs, correlations can be created which makes a crisis even worse.
Secular Cycles by Peter Turchin and Sergey A. Nefedov investigates the nature of biological and economic growth in combination with the characteristic social structures and power relationships unique to humans. This combination of Marxian and Malthusian analysis provides an interesting approach which can be developed to help predict future developments and understand how history develops.
The book (really an academic paper) is an analysis based on various data which have survived the ravages of time. It looks at cycles which occurred in various regions and times in the past, including Rome, France, England, and Russia. It shows how time after time humans progress, only to regress. And this “dis-integration” may be caused by either biological constraints and/or existing political structures. There also appears to be characteristic times which tend to correspond to successive generations or every other generation. And this wave or cyclical behavior is inherent in the complex system of homo-sapiens — being a social animal who spends 20+ years acquiring the knowledge and skills of ancestors.
I can only wish that more quantitative data were available to study ancient humans; ironically it is the “dis-integrative” phases of growth where data, observations, and history are destroyed and lost forever. Perhaps the next “integrative” phase of societal growth is a function of how much information is preserved from the previous “integrative” phase (think about Library of Alexandria). Formulaic conclusions based upon detailed and consistent data extending to the remote reaches of the past may forever be lost. Sometimes this data can be cleverly reconstructed (see here). Most of the time the data can not be obtained and this should serve to emphasize the importance of preserving the Noosphere for the sake of future societies.
I believe the developed world has the potential knowledge and power to prevent a large scale religious war in the Middle East which threatens to involve numerous superpowers. For the sake of all civilization, we must force a peaceful resolution. There is a hope that our technology has enabled us to predict and even prevent global disasters. Sadly, I have the impression that there are people and groups in power who are rather intent upon war, regardless of predictions. Or they are at least not supporting a peaceful resolution. Their very refusal to step down or change their strategy is in fact the problem.
Perhaps they don’t realize that most developed economies, including the United States, Europe and Japan are in dis-integrative secular cycles. Any global fighting will only accelerate the descent into local unrest and civil dissidence in the developed economies. It is important to remember that World World II began around ten years after the start of the Great Depression. The current global depression, yes depression (not recession), occurred about seven years ago. History does progress in cycles, not necessarily at periodic intervals, but the highest probability of global war is in the years following a global depression. Martin Armstrong has mentioned that November 20, 2014 was a critical date in his war cycle and that 2015 and 2016 are going to be volatile years.
Looking at The Bubble Index (10,080 and 20,160 days), shows that the DJIA and S&P 500 are both still in large scale decompression phases which started in 2008-9. Similar decompression phases in The Bubble Index occurred in the late 1960’s and lasted through the 1970’s. This marked a time of great civil unrest. And if you are an Elliott Wave follower, Daneric’s blog suggests the recent bull market is a “sucker’s rally” B wave off the 2009 lows, and that a C wave is about to unfold in the Wilshire 5000 (although there are other EW blogs, such as Caldaro, which predict different outcomes). If these predictions come true we are looking at a future in the next few years of political unrest and economic volatility. Only time will tell…
To me, the idea of infinite memory processes is one of the most important concepts touched on by Mandelbrot in this book. It suggests that economists and traders should be developing models and theories which value the importance of price series and data going back decades. And it makes sense to me that people and prices do not change their fundamental behavior over extended periods of technological evolution. However, I suspect that organisms do change their fundamental behavior if the time horizon is thousands or millions of years. I am very curious to read more about Hurst’s studies of the Nile.
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