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

[Paul D. Fernhout]

Michel Bauwens wrote:
> Here's my intuition:
> 
> - central planning is mostly dead

That's certainly true in the extreme in general (with the demise of the USSR 
which epitomized that).
   http://en.wikipedia.org/wiki/Planned_economy

But with that said, as Manuel de Landa points out, any real system is a mix 
of hierarchy and meshwork. So, for example, China has more that a billion 
people organized in some mix of central planning and market economies right now:
   http://en.wikipedia.org/wiki/Mixed_economies

So, trying to stretch the point, there are (guessing) only 500 or so really 
big companies (IBM, GE, Disney, ConAgra, etc.)
   "Global 500: Our annual ranking of the world's largest corporations"
   http://money.cnn.com/magazines/fortune/global500/2009/
that have major impacts on the kind of energy we use, the kind of computers 
we use, the kind of food we eat, the kind of media we watch, what medicines 
we have, the cars we drive, and so on. Not 100% of everything (there are 
small companies too, and university and independent and government 
research), of course. But these big firms shape a big chunk of day-to-day 
life for most people (in the USA at least) by being gatekeepers to what gets 
mass produced. In effect, they constitute a central planning framework, with 
a few thought leaders in every area, even if it is more an oligarchy and 
plutocracy and cartels than something like a monarchy.

But, in some ways, how is this different than, say, fifty departments in the 
USSR central planning office each with ten bureaucrats sitting around a table?

Sure, there is price feedback and so on, but that is in some ways more about 
*feedback* than *planning*. If we are going to talk about feedback, then we 
are left with the example of Cybersin in Chile of a system good at mixing 
central planning with feedback, but there is no reason a caring central 
planning organization in the USSR could not have done the same.

A big irony of the USSR's fall to me is that it came apart just as computers 
were getting fast enough to make central planning work in a Cybersin way 
with daily feedback instead of annual plans.
   http://www.google.com/search?hl=en&q=cybersyn
   http://en.wikipedia.org/wiki/Project_Cybersyn
"Project Cybersyn was a Chilean attempt at real-time computer-controlled 
planned economy in the years 1970–1973 (during the government of president 
Salvador Allende). It was essentially a network of telex machines that 
linked factories with a single computer centre in Santiago, which controlled 
them using principles of cybernetics. The principal architect of the system 
was British operations research scientist Stafford Beer."

Of course, the USSR had other problems too. But it is funny that people act 
like the fall has forever discredited central planning, given central 
planning is what most corporations do every day everywhere around the globe. 
It's just called "budgeting" to make it sound less "communist". :-)

 From Wikipedia:
   http://en.wikipedia.org/wiki/Budget
"""
Budget (from French bougette, purse) generally refers to a list of all 
planned expenses and revenues. It is a plan for saving and spending.[1] A 
budget is an important concept in microeconomics, which uses a budget line 
to illustrate the trade-offs between two or more goods. In other terms, a 
budget is an organizational plan stated in monetary terms. In summary, the 
purpose of budgeting is to:
    1. Provide a forecast of revenues and expenditures i.e. construct a 
model of how our business might perform financially speaking if certain 
strategies, events and plans are carried out.
    2. Enable the actual financial operation of the business to be measured 
against the forecast. ...
   The budget of a company is often compiled annually, but may not be. A 
finished budget, usually requiring considerable effort, is a plan for the 
short-term future, typically one year (see Budget Year). While traditionally 
the Finance department compiles the company's budget, modern software allows 
hundreds or even thousands of people in various departments (operations, 
human resources, IT etc) to list their expected revenues and expenses in the 
final budget.
   If the actual figures delivered through the budget period come close to 
the budget, this suggests that the managers understand their business and 
have been successfully driving it in the intended direction. On the other 
hand, if the actuals diverge wildly from the budget, this sends an 'out of 
control' signal, and the share price could suffer as a result.
"""

> - but monetized markets are not good for everything

Sure. Markets fail for all sorts of reason, including, in the short term, 
inelastic demand for stuff like oil and health care:
  http://en.wikipedia.org/wiki/Price_elasticity_of_demand
(Everything is elastic somewhat in the long term probably, which is Julian 
Simon's point.)

Or, there are other factors that may come up. External costs (negative like 
pollution or positive like good health). Systemic risks. War being 
profitable. Centralization of wealth. Weakening labor value in the face of 
automation. A few players get to set standards to their own short-term 
benefit. And so on. Although these can also cause problems in central 
planning too.

> - what we can develop though is coordination, i.e. following the model of
> large scale coordination of small groups, pioneered by linux and wikipedia
> through stigmergy and holoptism, but applying it to production, assuming
> that productive entities can see each other's production, compare that to
> the demand (also available via retail) and so adjust production to real need

One issue with markets is to separate out the issues of signaling demand 
using tokens (fiat currencies, kanban tokens, emails) versus rationing who 
can make demands under what circumstances (they have ration units, they are 
well liked by the producer, they have political power, they have a "job", 
they are old enough to qualify for Medicare, etc.).

The thing about the digital world, is that copying and distribution is so 
cheap (so little incremental cost) that rationing is not a big issue for 
things once they are made. In the digital realm, all the arguments are about 
funding new works. (Services distributed digitally may be a different story 
than content, if they require human effort per unit delivered.) And the 
digital world is so glutted with good content (who could read it all? Or 
view it all? Just what is there?) that there is little demand for new stuff 
already. (Not to say we don't need new stuff in certain directions, but 
there are many lifetimes of entertainment out there already as a baseline, 
and a very workable set of computer software for basic communications and so 
on, not to say it can't be improved of course.)

So, it's not clear to me that the two realms of digital production and 
physical production are that similar right now, even if I do think they are 
converging.

One way they are converging is "the center for bits and atoms" way, where 
you use bits to print atoms in 3D printers, and you use atoms to scan in 
bits with 3D scanners. But a personal 3D printer that is really good 
essentially jumps over this issue you raise of managing demand and so on. 
How many families need much to manage the demand of their home 2D printer 
these days? The average home 2D printer has vast amounts of spare capacity, 
especially assuming people are doing most of their viewing of content on 
display screens now.

But, sooner than 3D printers we may see more neighborhood scale FabLabs. In 
a way, this is following the scaling of computers -- bureaucracies to 
mainframes to minis to micros to embedded. So, now the average car can 
second by second do the same amount of calculation that used to be required 
by a vast bureaucracy to keep the Ancient Egyptian economy running back in 
2000 B.C.

A Star Trek "replicator" is one endpoint on physical manufacturing (food 
might be different, and maybe utility fog might be an alternative even for 
manufacturing if is safe).

Nobody really knows how best to navigate from here to there over the next 
thirty years, or exactly what mix of scales of systems we'll end up with for 
manufacturing. As Alan Kay says, "The best way to predict the future is to 
invent it."

> in short: central planning is replaced by regional, national, global
> coordination when and where needed,

Yes, as above. And outside of manufacturing, there are a lot of cultural, 
environmental (watershed or bioregion), political, and other issues that 
will drive a lot of that. But somehow, I think they will have less and less 
to do with manufacturing than now. I've talked about Peak Population as a 
crisis, and here it seems we may already have passed "Peak Shipping" (not 
that I am that worried about that one):
"Revealed: The ghost fleet of the recession anchored just east of Singapore"
http://www.dailymail.co.uk/home/moslive/article-1212013/Revealed-The-ghost-fleet-recession-anchored-just-east-Singapore.html 

"The biggest and most secretive gathering of ships in maritime history lies 
at anchor east of Singapore. Never before photographed, it is bigger than 
the U.S. and British navies combined but has no crew, no cargo and no 
destination  -  and is why your Christmas stocking may be on the light side 
this year "

That fleet may yet recover, but I don't think it is going out on a limb to 
say we will see even bigger "ghost fleets" in a decade or so from now, as 
people are able to produce more and more goods and energy locally. I'd 
suggest repurposing those ships as like traveling cruise ships, something 
that I think will increase in demand with more seasteading. :-)
   http://en.wikipedia.org/wiki/Seasteading

One thing I think might change some of that is local recycling programs. 
Manufacturing of real stuff rapidly hits the wall of materials being 
expensive and hard to come by sometimes (especially if you rely on mines far 
away). If you can recycle stuff like aluminum and plastic locally, then you 
can be more independent. Note that this series of books is about building 
your own tools from "scrap" not from "scratch":
   "Build a Complete Metalworking Shop from Scrap!: The Legendary Series of 
Machine Tool Construction Manuals"
   http://www.lindsaybks.com/dgjp/djgbk/series/index.html

Though eventually we'll get better at getting materials out of the air, 
seawater, and sand, and doing that all as elegantly as bacteria can, not 
this crude and dangerous way (yet still possible):
   "LMF Chemical Processing Sector"
   http://www.islandone.org/MMSG/aasm/AASM5E.html

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