Competition, Farms, and the Democratization of Innovation

Undeniably, we are now living in a world that is exceptionally complex. Although the world may not be any more complex and dynamic than it was a few centuries or millenia ago from a physical perspective, it seems clear that from a social perspective the world has skyrocketed in its complexity, especially since the industrial evolution and the process of "globalization." It also seems clear that this trend will almost certainly continue exponentially in every sector of life. From the personal and social connections we make to financial markets and international governance, the world is getting bigger and more interconnected.

In general, I find this to be a pretty hopeful and beautiful thing: knowledge is being democratized (by the internet, as well as big-minded projects like PLOS and One Laptop Per Child) and I think for the first time we are really able to actually imagine the solutions to problems that are fundamentally international in nature (e.g. the drug trade, hunger, poverty, and especially global environmental issues).

This new kind of world, though, is also going to bring about a whole new set of problems. This was highlighted for me recently during the beginning of the economic shitstorm when I was listening to an NPR interview, which was actually about artificial intelligence. What stuck with me about the interview was the discussion of the computer programs that determine what happens in the financial markets. Obviously, the financial markets are too complex for anyone to predict in their specifics. And so, lots and lots of shareholders (which i think include private, small-time investors, although I could be wrong about this, I know embarrasingly little about the world of money) put sort of preset "sell" mechanisms on their holding. So, if the values of certain stocks fall below these setpoints, it can start a sort of wave of selling, which then can sort of reveberate out through the market. What was amazing, and sort of shocking to me, was to hear that not only is this very complicated (and apparently important) system being run at least in part by a bunch of computers, but that the effects were so complicated that nobody could figure out what happened, so that they had to write other computer programs to figure out what the other computer programs were doing!

So, this is scary because (a) the machines are taking over (huge vindication for all the sci-fi nerds), but also because (b) it represents how we've created mechanisms in the world that can themselves gain complexity and then sort of go beyond our ability to easily understand and control.

So, long introduction, but this got me thinking about how things like innovation, regulation, and control are going to have to change in this new way-too-complex future. In particular, I think we're going to have to come up with "smart" systems for understanding and controlling these very complex global systems.

One model for this that I find very intriguing is called "evolutionary computation," from computer science. From what I understand, evolutonary computation is a name for lots of different styles of computation that involve creating iterative programs that will progress slowly towards a "fitter" solution through many generations of calculation.

One example is from architecture. Imagine there is some leeway in how you can arrange some structural elements (maybe "struts") spatially in a building, but you want to find the best arrangement. And you know that you want to maximize some aspect of the building, let's say "toughness." People are creating programs that will randomly generate a whole variety of different arrangements of struts (the parallel of mutations in a natural population), and then they test all these different arrangements for "toughness." The specific arrangements of struts that perform best get to have "offspring," or new arrangments that are roughly like them but with some more mutations, and then the whole process is repeated. The result is basically that the program roughly imitates the smart processes of evolution and designs something all on its own.

Although this is a rough example, I think it still points to a useful direction in how we can sort of "decentralize" the analytical thought process. I think the same kind of thing can apply to societies. If we can figure out ways to bring innovation and analysis away from central "brains," such as centralized policies or governments, and out into the rest of the world, this opens up tons of new possibilities. And, it may even be the only way to move forward as the mechanisms of the world (such as financial markets and the internet) become too gigantic for a centralized brain to handle easily.

So, as a final endpoint, I want to bring this around to what I've been getting really interested in recently: local farms. I've recently started volunteering at a local organic farm, and I've been incredibly impressed with the innovative and dedicated work that is being done with basically no resources and very little overhead support from either a government or an academic institution. They're working on projects to build a solar-powered kitchen, expanding the visibility of good food by bringing it to impoverished communities for very cheap, having a roving biodiesel delivery system for their crops, and tons of other stuff. My point is that this is what we need more of: small-scale, decentralized innovation and problem-solving. In the spirit of Thomas Friedman, I think the best way for us to stay competitive in the modern world is to decentralize the system of innovation and encourage people to make change on the grassroots level (something that would seem especially appropriate in the age of Obama). There's lots of smart people out there with ideas that could make swift and effective change. Let them do their thing.

Evolution, Death, and the Free Market

Since the beginning of the current economic crisis, I've been thinking about the general parallels between biological systems and economic systems, and particularly about concepts of how each of these systems works toward becoming "better," whatever that means for each respective field. (Disclaimer: my understanding of the biological world has quite a bit more nuance than the economic, so I apologize ahead of time for all of the butcherings, false claims, oversimplications, and general prostitutings of economic ideas that follow).

Despite tons of differences, there are some overarching and important similarities between the economy and evolution. Both Adam Smith and Darwin were (explicitly or not) influenced by the thinking of Malthus, emphasizing the limited nature of many (if not all) resources. From this style of thinking, both Smith and Darwin realized that competition was an essential aspect of progress. Perhaps more fundamentally, each viewed their respective system as being spontaneously self-organized by limited resources and competition. (I see both of these systems as examples of the larger theme of emergence, a subject on which i will post in the near future).

Smith saw that in a system of economic exchange, competition was the most important driving force behind change. If you start with the premise that resources (money, time, goats, whatever) are limited, and that each individual is going to act in their own self-interest, society is bound to get better. Self-interest (importantly, combined with the ability to individuals within society to freely choose between a given set of options) leads to lowering prices and spurring innovation within markets and so on, the "invisible hand" of fundamental self-interestedness becomes the driving force behind socio-economic change, and the modern free-market economy is born.

Darwin most likely drew directly on the work of Adam Smith in his own revolutonary theories on the biological world. When applied to the biological world, the same basic principles of limitiations, competition, and self-interest emerge. Ultimately, there are not enough resources in the world for all species to reproduce infinitely. Given this fact, and the fact that there are differences between individuals in terms of their ability to reproduce, those individuals who reproduce more (through faster generation times, higher survival, sperm competition, or any of a gajillion other evolutionary mechanisms) will pass their traits onto the next generation in greater numbers than others, and the world will look a little more like them. Through the self interest of genes (for lots lots more, see Richard Dawkins, The Selfish Gene) the world is in a continual process of change and progress (depending on your perspective).

So this, very briefly, covers, evolution and the free market. In both society and the biologocial world, there are lots of discrete actors (in society, us, in biology, genes) fighting for limited resources in a slf-interested way, and this leads to a change in the landscape of society/biology. In general, I think this overarching analogy between are fairly well explored and acknowledged, despite lots of infighting over piddling details among academics. But now, I want to talk a little more about why i actually posted this up here, and this is death, and how it relates to this analogy.

Death is a sad, nasty thing in almost every way. It is the opposite of all meaning, inherently. Oddly, however, it is fundamental to any coherent understanding of evolution. The nice way to word evolution is that there is "differential survival" between individuals, which is another way of saying that some survive and some die (or are never born). Without death, there cannot be any overall change in the genetic structure of a population. These overall genetic changes in the long run improve the robustness of a species, because this species becomes more adept at survival in the face of a set of particular environmental changes.

Evolutionary thinking is frequently applied to the economy, both academically and colloquially (i.e. the "survival of the fittest"). Certain parts of this analogy, such as competition, limited resources, and progress through self-interest, transfer fairly directly and I think cleanly from evolution to the economy. I would argue that in addition to these, however, the role of death also tranfers to the economy. If we allow a "free market" system that runs in parallel to evolution, then there are obvious examples of market "death," the most obvious examples being bankruptcies and recession.

It seems to me that is an inevitable part of the analogy between evolution and the economy, and one deserving of attention. Clearly, death is a necessary part of the evolutionary system, both in the form of individuals deaths (analogous to bankruptcies) and also in the form of more devastating events such as the KT Event or the Permian extinction (analogous to major recessions and/or depressions) which usher in major systemic change in how a system functions.

The question that we face, I believe, is whether or not we are willing to accept the costs (i don't really think they're risks, because they are in some global sense inevitable) of having a free market system that is largely analogous to an evolutonary system. Are we willing to accept the effects of "market death," (i.e. widespread joblessness and inumerable social tolls)? If the answer is no, then this probably implies a move toward higher levels of market regulation (as well as increased social safety), which seems to be the direction in which we're heading. It seems obvious to me that some level of regulation is necessary, and that individual members should indeed be shielded from at least some effects of the free market (health care is for me, the most obvious and pressing example of this), but do these regulations weaken our economy as a whole, and its robustness in response to the larger economic environment?

To add a bit of personal complication, i find it kind of odd as I think through these issues that when I think strictly about politics and the economy, free of biology, I am a strong supporter of regulation and a more socialist system. But when i apply an evolutonary perspective, it is hard for me not to think about the pitfalls that seem to be associated with interfering with "death." I guess the ideal system would be one where we can allow the dynamics of the evolutionary/market environment (the competition, success, survival and death inherent in the market) to play out on a level that is removed from the lives of members of our society. And thoughts on how that could actually happen will be fodder for another post.

Freedom from liberty

This is an idea I've been thinking about for a few days after listening to an NPR interview with MT Anderson, author of The Astonishing Life of Octavian Nothing. I have not read the book (and don't really plan on it), but there was an interesting, short bit of the interview where they were discussing the idea of "liberty." The basic idea, as I remember it (or as I have shifted it in my selective memory) was that there were at least two, competing conceptions of liberty in early American history, and especially during the period of the civil war. One conception of liberty was that argued for by abolitionists who believed in the fundamental liberty of man and used this to argue for slaves' right to freedom. On the other hand, secessionists also invoked liberty to justify their own political stance. Jefferson Davis, for example, argued for liberty against "the tyranny of an unbridled majority" (From wikipedia.)

Reflecting on how these contradictory political agendas could both be justified in the name of liberty, i began to appreciate the complications that arise from using this word. When we are speaking of universal liberty, are we talking about each individual's liberty? Or a territory or a state's liberty? The reality is, there is no set agenda on this. When people talk of liberty, they can be speaking on almost any level of analysis.

To add complication to this, "liberty" is used largely interchangeably with "freedom," which opens up another pandora's box of problems (i.e. the difference between positive and negative freedom, or the difference in definition between "freedom" in politics and in philosophy). It seems fundamental that liberty is constrained in a whole bunch of ways. A really interesting, and relevant, form of constraint on freedom in economic: We are all certainly constrained from certain actions for certain economic reasons, and the contours of these restraints depend on your income. I am restrained from buying a new car and lots of luxury items. Other people are restrained by their economic status from completing even more basic tasks, like buying food for their family. Wealthy individuals are constrained too just in a different way. Maybe they really want to buy a trip to space, but they just bought their 11th house, and so they can't quite afford it right now. This obviously sounds absurd when placed next to the other examples, but it is indeed on some level a constraint on action, however frivolous that action may be.

My goal here, though, is not to engage in the ongoing philosophical discussion on conceptions of freedom and liberty, on which subject many others have thought much longer and harder and have written much more eloquently.

Instead, when I was hearing about this historical complexity in the idea of liberty, I began to think about modern politics, and I realized that this complication has not disappeared at all. "Liberty" and "freedom" are invoked in almost any discussion or speech of American foreign (e.g. practically every Bush speech in the last eight years). There is part of me that thinks that the ideal of liberty has at least some good in itself, and we all have some instincts about it, even if we haven't engaged in deep philosophical thought about. We all have the general idea that liberty is good thing in the world. But the civil war example really begins home the fact that there may not be any inherent good in the idea of liberty at all. My thought then, is that if this is true, then "liberty" and "freedom" may have become very dangerous concepts in modern politics, because they subsume a huge variety of motives and policies under a word that has such strong historical weight behind it. Perhaps it would be better for us to stop using these words altogether...