[p2p-research] Cybernetics the missing piece for partnership state and steady state economy?

[Paul D. Fernhout]

That "945 marginal tax rates" was supposed to be "94% marginal tax rates".

See, for an example of what the USA will *eventually* do in the next decade 
if it is to survive as a viable system:
   http://en.wikipedia.org/wiki/Franklin_D._Roosevelt
"""
The U.S. economy grew rapidly during Roosevelt's term.[66] However, coming 
out of the depression, this growth was accompanied by continuing high levels 
of unemployment; as the median joblessness rate during the New Deal was 
17.2%. Throughout his entire term, including the war years, average 
unemployment was 13%.[67][68] Total employment during Roosevelt's term 
expanded by 18.31 million jobs, with an average annual increase in jobs 
during his administration of 5.3%.[69]
   Roosevelt did not raise income taxes before World War II began; however 
payroll taxes were also introduced to fund the new Social Security program 
in 1937. He also got Congress to spend more on many various programs and 
projects never before seen in American history. However, under the revenue 
pressures brought on by the depression, most states added or increased 
taxes, including sales as well as income taxes. Roosevelt's proposal for new 
taxes on corporate savings were highly controversial in 1936–37, and were 
rejected by Congress. During the war he pushed for even higher income tax 
rates for individuals (reaching a marginal tax rate of 91%) and corporations 
and a cap on high salaries for executives. In order to fund the war, 
Congress broadened the base so that almost every employee paid federal 
income taxes, and introduced withholding taxes in 1943.
"""

Note, beyond a faltering infrastructure, the USA is currently fighting at 
least two wars (Iraq and Afghanistan), both of which have gone on for longer 
than WWII.

Historically, that high marginal tax rate (so, paid by high earners on the 
extra high income) created booming businesses, because wealth was spread 
around so everyone could spend it or start businesses with it. That tax 
policy created a relatively-affluent middle class and a vibrant social 
landscape leading to the family values of the 1950s because families only 
needed one wage earner, so one spouse could interact locally with children 
as well as peers, all outside the marketplace. And all that was happening 
even as much productive capacity was being used for war. It is true that was 
in part because the government was redistributing money from those who were 
doing tremendously well to everyone else, but it was justified on the basis 
that the economy was a common system, with common needs, and that there is 
an inherent problem with markets that the rich get richer and wealth 
centralizes otherwise causing the system to freeze up. By analogy, in a 
garden, one sunflower inches away from many others will grow big while it 
outcompetes all the others around it for nutrients, and as it gets bigger in 
will outcompete others even better. In the garden, that is why gardeners 
will "thin" out plants, but the equivalent action to humanity ("thinning 
out" the poor) would be horrendous (although it happens in practice, say 
with poorer people having little access to health care, as the USA has 
chosen to ration health care based on economic status). Intervening to 
redistribute wealth prevents this centralization and concentration of 
wealth, and thus prevents this runaway positive feedback loop of a 
competitive economic arms race. One way to do that is related to a basic 
income and universal health care paid for through progressive taxes (and 
other revenue sources like renting government land or a high tax on fossil 
fuels or other market aspects with negative externalities).

Still, even within gardens, if one keeps the soil healthy, with plenty of 
rock dust and organic matter, and water, one may still see a lot of growth 
by all plants that might otherwise be stunted. That's equivalent to creating 
general abundance in some ways. And peer-to-peer work on a commons like 
Wikipedia can accomplish that to an extent outside of direct government 
support, as, maybe someday, open manufacturing will as well.

But ironically, this is what conservative/libertarians think of Roosevelt's 
high marginal tax rate policy that created a vibrant middle class:
   http://www.heritage.org/research/taxes/wm327.cfm
"""
There is a distinct pattern throughout American history: When tax rates are 
reduced, the economy’s growth rate improves and living standards increase. 
Good tax policy has a number of interesting side effects. For instance, 
history tells us that tax revenues grow and “rich” taxpayers pay more tax 
when marginal tax rates are slashed. This means lower income citizens bear a 
lower share of the tax burden – a consequence that should lead class-warfare 
politicians to support lower tax rates.
"""

And the conservatives go on to cite economic bubbles like leading up to 1929 
as justifications of this policy, while ignoring huge rich/poor disparities 
and the collapse of markets under that. Just like now, Obama is already 
blamed (less than a year in office) for the economic crisis, which, 
according to the most extreme conservatives, occurred only because there was 
too *much* regulation and too *high* taxes. (What truth there is to that is 
probably that too much of US taxes go to the military and not wealth 
redistribution).

The problem is that markets can't function well with centralized wealth, or 
essentially, you just have the worst parts of USSR central planning but with 
a few plutocrats instead of a few Party members making key economic decisions.

President Barack Obama got it right when he said, from his heart, to "Joe 
the Plumber" that we should "spread the wealth around" to have a better 
society. But the problem is, unless Obama moves past mainstream economics 
(basically, mainstream macroeconomic is an apology for current social 
hierarchy a this point)
   "The Mythology of Wealth | Conceptual Guerilla"
  http://www.conceptualguerilla.com/?q=node/402
Obama will not have a rational model for explaining what his heart tells him 
is right. And so the "conservatives" conserving only the last few decades of 
disaster for the US middle class tear his statements apart. And, the 
conservatives are doing this fairly, in the sense that Obama can't explain 
technically why his heart is right as long as he tries to do it in a 
mainstream macroeconomic paradigm that led to the current economic disaster. 
Basically, you have Obama saying, "let's be nice to each other" and the 
conservatives saying "that will never work because of such-and-so in our 
collective ideology that you agree with too".

But *cybernetic* theories of decision making will better show how what Obama 
said from the heart also makes a lot of sense in reality. A cybernetic 
approach, looking at feedback cycles and information flows, shows why 
Obama's statement from the heart was right, because of basic cybernetic 
reasons of managing positive feedback loops (arms races of 
the-rich-get-richer) and negative feedback loops (downward spirals of 
the-poor-get-poorer).

The human "heart" (in the sense of collective peer-to-peer behavior) has 
been evolving for thousands, even millions, of years, where a good 
cybernetic model of collective action was punished by life and death for 
communities. The human "head" in terms of neo-liberal/libertarian economics 
has been evolving for only a few decades, or at most a few hundred years. 
Which is more likely to be right in the long term? Cybernetics help us see 
rationally why our hearts are so wise intuitively.

--Paul Fernhout
http://www.pdfernhout.net/

Paul D. Fernhout wrote:
> It's interesting to me to see this cybernetics issue coming up as a 
> theme (E see it's been mentioned twice before in subjects).
> 
> That video is related to an issue I brought up in Post-Scarcity 
> Princeton on reinventing economics where I mentioned cybernetics 
> (including three levels of a model). From theret:
>   "Post-Scarcity Princeton "
>   http://www.pdfernhout.net/post-scarcity-princeton.html
> """
> Here is a sample meta-theoretical framework PU economists no doubt could 
> vastly improve on if they turned their minds to it. Consider three 
> levels of nested perspectives on the same economic reality -- physical 
> items, decision makers, and emergent properties of decision maker 
> interactions. (Three levels of being or consciousness is a common theme 
> in philosophical writings, usually rock, plant, and animal, or plant, 
> animal, and human.)
>   At a first level of perspective, the world we live in at any point in 
> time can be considered to have physical content like land or tools or 
> fusion reactors like the sun, energy flows like photons from the sun or 
> electrons from lightning or in circuits, informational patterns like web 
> page content or distributed language knowledge, and active regulating 
> processes (including triggers, amplifiers, and feedback loops) built on 
> the previous three types of things (physicality, energy flow, and 
> informational patterns) embodied in living creatures, bi-metallic strip 
> thermostats, or computer programs running on computer hardware.
>   One can think of a second perspective on the first comprehensive one 
> by picking out only the decision makers like bi-metallic strips in 
> thermostats, computer programs running on computers, and personalities 
> embodied in people and maybe someday robots or supercomputers, and 
> looking at their characteristics as individual decision makers.
>   One can then think of a third level of perspective on the second where 
> decision makers may invent theories about how to control each other 
> using various approaches like internet communication standards, ration 
> unit tokens like fiat dollars, physical kanban tokens, narratives in 
> emails, and so on. What the most useful theories are for controlling 
> groups of decision makers is an interesting question, but I will not 
> explore it in depth. But I will pointing out that complex system 
> dynamics at this third level of perspective can emerge whether control 
> involves fiat dollars, "kanban" tokens, centralized or distributed 
> optimization based on perceived or predicted demand patterns, 
> human-to-human discussions, something else entirely, or a diverse 
> collection of all these things. And I will also point out that one 
> should never confuse the reality of the physical system being controlled 
> for the control signals (money, spoken words, kanban cards, internet 
> packet contents, etc.) being passed around in the control system.
>   The above is somewhat inspired by "cybernetics".
>     http://en.wikipedia.org/wiki/Cybernetics
> So, I'd suggest, should the PU Economics Department faculty be kept on, 
> the department should be renamed the "Princeton University Cybernetics 
> Department" with there being an "historical economics" subsection all 
> the current economics faculty are assigned to, and one faculty member 
> each from the PU Department of Religion, the PU Department of History, 
> and the PU department of Mechanical and Aerospace Engineering be put in 
> as an acting team triumvirate leadership of the larger department. :-) 
> As economics faculty broaden their research, then they could move into 
> other new Cybernetics department sections. See also:
>     "The Human Use Of Human Beings: Cybernetics And Society" by Norbert 
> Wiener
>   
> http://www.amazon.com/Human-Use-Beings-Cybernetics-Paperback/dp/0306803208
> """
> 
> One can compare/contrast with that video:
>   "Management Cybernetics: The Cybernetic State"
>   http://www.youtube.com/watch?v=wrgRJiJBU2I
> "The Cybernetic State is inevitable. We have everything to do it. We 
> look the basic structure of the modern democratic state through the lens 
> of Management Cybernetics and the Viable System Model. The teachings of 
> Stafford Beer are applied to understanding the evolution of the State 
> and the reason why Law, Economics and Politics are different aspects of 
> the State. The Cybernetic State is not so much about computers as it is 
> about following nature's rules. The influence of the Iroquois on the US 
> Constitution is referenced. "
> 
> Though one has to be cautious about elitism; also that video misses the 
> issue of meshwork and hierarchy balance, and misses some understanding 
> of the diversity of nature. But it is a great start down that road.
> 
> The video relates to the first 9/11 (in Chile, in 1973) where people in 
> the USA government actively destroyed the first computerized cybernetic 
> government on the planet (it was mixing aspects of top-down and 
> bottom-up control, so, had some form of hierarchy/meshwork balance):
>   http://en.wikipedia.org/wiki/Project_Cybersyn
> 
> And the video mentions the Iroquois Confederacy:
> http://www.google.com/search?hl=en&q=100th+congress+iroquois+331&btnG=Search 
> 
> 
> Leading to:
> "H. Cons. Res 331"
> http://senate.gov/reference/resources/pdf/hconres331.pdf
> "100th congress. 2d Session. H. CON. RES. 331. IN THE SENATE OF THE 
> UNITED STATES ... To acknowledge the contribution of the Iroquois 
> Confederacy [to the development of the US Constitution]..."
> 
> So, while the Iroquois used wampum (tapestries of beads) instead of 
> electronics as their external computing, communication, and 
> record-keeping medium, See:
> 
> "NativeTech: Wampum; History and Background"
> http://www.nativetech.org/wampum/wamphist.htm
> "Wampum as Hypertext: An American Indian Intellectual Tradition of 
> Multimedia Theory and Practice"
> http://muse.jhu.edu/journals/studies_in_american_indian_literatures/v019/19.4haas.html 
> 
> 
> maybe it would be fairer to consider the Iroquois Confederacy the first 
> cybernetic government on the planet? And one *also* severely damaged by 
> the corporatized social system brought from England that would later 
> control the US government? :-(
> 
> Anyway, one might hope for a peaceful upgrade of the US government and 
> related socio-economic systems to incorporate more aspects of 
> cybernetics over time. Still, ultimately, a broad definition of human 
> rights is essential to make any such systems function well for most 
> people. The Iroquois had that too, so it is not just the notion of "a 
> learning people", or a "system of checks and balances", but also 
> upholding core values.
> 
> In the USA, those values were articulated in 1941 by US President 
> Franklin Roosevelt to an extent (in an age that already had 945 marginal 
> tax rates), but the last seventy years has seen a long struggle to 
> achieve them against a neo-conservative backlash:
> http://en.wikipedia.org/wiki/Four_Freedoms
> """
> The Four Freedoms are goals famously articulated by United States 
> President Franklin D. Roosevelt, urged by wife Eleanor Roosevelt and 
> friend Jon Run, on January 6, 1941. In an address also known as the Four 
> Freedoms speech, FDR proposed four points as fundamental freedoms humans 
> "everywhere in the world" ought to enjoy:
>    1. Freedom of speech and expression
>    2. Freedom of religion
>    3. Freedom from want
>    4. Freedom from fear
> His inclusion of the latter two freedoms went beyond the traditional 
> American Constitutional values protected by the First Amendment, and 
> endorsed a right to economic security and an internationalist view of 
> foreign policy that have come to be central tenets of modern American 
> liberalism. They also anticipated what would become known decades later 
> as the "human security" paradigm in social science and economic 
> development.
> """
> 
> A "Basic Income" and universal health care is an updated version of that 
> third theme.
>  http://en.wikipedia.org/wiki/Basic_income
> And as mentioned in the "Triple Revolution" memorandum is essential for 
> cybernetic reasons:
>   http://educationanddemocracy.org/FSCfiles/C_CC2a_TripleRevolution.htm
> """
> The Cybernation Revolution: A new era of production has begun. Its 
> principles of organization are as different from those of the industrial 
> era as those of the industrial era were different from the agricultural. 
> The cybernation revolution has been brought about by the combination of 
> the computer and the automated self-regulating machine. This results in 
> a system of almost unlimited productive capacity which requires 
> progressively less human labor. Cybernation is already reorganizing the 
> economic and social system to meet its own needs.  ... The continuance 
> of the income-through jobs link as the only major mechanism for 
> distributing effective demand—for granting the right to consume—now acts 
> as the main brake on the almost unlimited capacity of a cybernated 
> productive system.
> """
> 
> "Mutual security" by Morton Deutsch is an updated version of that fourth 
> theme, and something that again relates to Cybernetics (since it tries 
> to dampen down positive feedback loops that lead to arms races). Example:
> http://www.beyondintractability.org/audio/morton_deutsch/?nid=2430
> 
> My interest in peer to peer is in part not so much a desire to see p2p 
> everywhere in everything as the *only* control system, so much as to, 
> following Manuel de Landa, rebalance our current system, so that peer to 
> peer meshworks regain a lot of the importance they once had. So, I 
> expect that p2p meshworks will interact with hierarchies that peers 
> create or direct for self governance (like, for example, standards of 
> internet packet exchange, or authorities that regulate and tax markets).
>   http://www.t0.or.at/delanda/meshwork.htm
> 
> Or, as US President Lincoln said, my efforts are ideally so that:
>   http://en.wikipedia.org/wiki/Gettysburg_Address
> "government of the people, by the people, for the people, shall not 
> perish from the earth."
> 
> But within that, there is a lot of room for negotiation and experiment. 
> :-) Again, from Manuel de Landa:
>   http://www.t0.or.at/delanda/meshwork.htm
> "Indeed, one must resist the temptation to make hierarchies into 
> villains and meshworks into heroes, not only because, as I said, they 
> are constantly turning into one another, but because in real life we 
> find only mixtures and hybrids, and the properties of these cannot be 
> established through theory alone but demand concrete experimentation."
> 
> --Paul Fernhout
> http://www.pdfernhout.net/
> 
> 
> Michel Bauwens wrote:
>> Thank you for the contribution, which will appear on the 20th!
>>
>> (
>> http://blog.p2pfoundation.net/cybernetics-for-resource-based-economics/2009/09/20 
>>
>> )
>>
>> Michel
>>
>> On Fri, Sep 18, 2009 at 10:58 AM, Alton Lindsay Jr.
>> <junioreality at yahoo.com>wrote:
>>
>>> One of the key aspects of enhancing P2P in the material world is 
>>> figuring
>>> out how we can divide up natural resources for means of production. And
>>> while we divide up such resources, the need for stabilizing this 
>>> resource
>>> throughput and waste disposal is important in not deteriorating 
>>> ecosystems.
>>>  The current organizational structures of governments and 
>>> corporations are
>>> not designed for such solutions. What does a new redesign look like? 
>>> This is
>>> the answer from the viewpoint of Cybernetics and the Viable System 
>>> Model.
>>> Parliaments and Congresses are replaced by citizens chosen for their
>>> knowledge and competence, not their ability to run political campaigns.
>>> Ideology is scrapped in favor of practical organizations and technical
>>> solutions.
>>>
>>> http://www.youtube.com/watch?v=wrgRJiJBU2I&feature=related
>>>
>>>
>>>
>>>
>>>
>>> Cybernetics is inevitable and we have the means to do it in every 
>>> aspect of
>>> the social environment. When computers eventually have sensors 
>>> extended into
>>> all areas of the physical and social complex, we will be able to achieve
>>> centralization of decision-making. In a global resource-based economy,
>>> decisions would not be based on local politics but on a holistic problem
>>> solving approach.
>>>
>>>
>>>
>>> For example, with electrical sensors extended into the agricultural 
>>> region,
>>> computerized systems would manage and control agriculture by 
>>> monitoring the
>>> water table, insects, pests, plant diseases, soil nutrients, and so 
>>> forth.
>>> The information processed will enable us to arrive at more appropriate
>>> decision-making based on feedback from the environment.
>>>
>>>
>>> Computers, open software, and artificial intelligence will serve as
>>> catalysts for change. They will establish scientific scales of 
>>> performance.
>>> Eventually, the installation of machine decision-making will manage all
>>> resources serving the common good of a steady state economy and P2P
>>> production.
>>>
>>>
>>> This will result in a more humane and meaningful approach for shaping
>>> tomorrow’s civilization that is not based on the opinions or desires 
>>> of a
>>> particular sect or individual. All decisions would be made on the 
>>> basis of a
>>> comprehensive survey of resources, energy, and existing technology 
>>> without
>>> allowing any advantage to a particular nation or select group of people.
>>>
>>>
>>> This may be accomplished with large-scale, computer-based processors 
>>> that
>>> can assist us in defining the most humane and appropriate ways to manage
>>> environmental and human affairs. This is essentially the function of
>>> government. With computers processing trillions of bits of 
>>> information per
>>> second, existing technologies far exceed the human capacity for 
>>> processing
>>> information and they can arrive at equitable and sustainable 
>>> decisions about
>>> the development and distribution of physical resources. With this 
>>> potential,
>>> we would evolve beyond political decisions made on the basis of power 
>>> and
>>> advantage.
>>>
>>>
>>> Further readings on cybernetics:
>>>
>>>
>>> http://pespmc1.vub.ac.be/ASC/CYBERNETICS.html
>>>
>>>
>>> http://www.thevenusproject.com/images/stories/a-designingthefuturee-book.pdf 
>>>
>>>
>>> http://en.wikipedia.org/wiki/Viable_System_Model
>>> http://www.metaphorum.org/govpol.htm
>>>
>>>
>>> --- On *Thu, 9/17/09, Michel Bauwens <michelsub2004 at gmail.com>* wrote:
>>>
>>>
>>> From: Michel Bauwens <michelsub2004 at gmail.com>
>>> Subject: Re: Cybernetics the missing piece for partnership state and 
>>> steady
>>> state economy?
>>> To: "Alton Lindsay Jr." <junioreality at yahoo.com>
>>> Date: Thursday, September 17, 2009, 10:59 PM
>>>
>>> Dear Alton:
>>>
>>> Would you like to write an intro to that video, which we could show 
>>> on the
>>> site, and explain how you see the connection with steady state and p2p?
>>>
>>> In any case, thanks for the references!
>>>
>>> It's not an area I'm well versed in myself,
>>>
>>> Michel
>>>
>>> On Fri, Sep 18, 2009 at 9:49 AM, Alton Lindsay Jr. 
>>> <junioreality at yahoo.com<http://mc/compose?to=junioreality@yahoo.com>
>>>> wrote:
>>>>  Hello, I've recently became a big reader of your p2p blog and i 
>>>> thought
>>>> you would find this video and readings on Cybernetics interesting and a
>>>> possible solution for establishing a partnership state and a steady 
>>>> state
>>>> economy.
>>>>
>>>> http://pespmc1.vub.ac.be/ASC/CYBERNETICS.html
>>>> http://www.youtube.com/watch?v=wrgRJiJBU2I&feature=related
>>>> http://en.wikipedia.org/wiki/Viable_System_Model
>>>> http://www.metaphorum.org/govpol.htm
>>>>
>>>>
>>>
>>> -- 
>>> Work: http://en.wikipedia.org/wiki/Dhurakij_Pundit_University - 
>>> Research:
>>> http://www.dpu.ac.th/dpuic/info/Research.html - Think thank:
>>> http://www.asianforesightinstitute.org/index.php/eng/The-AFI
>>>
>>> P2P Foundation: http://p2pfoundation.net  - 
>>> http://blog.p2pfoundation.net
>>>
>>> Connect: http://p2pfoundation.ning.com; Discuss:
>>> http://listcultures.org/mailman/listinfo/p2presearch_listcultures.org
>>>
>>> Updates: http://del.icio.us/mbauwens; http://friendfeed.com/mbauwens;
>>> http://twitter.com/mbauwens; http://www.facebook.com/mbauwens
>>
> 
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