About Feed Das deutsche Innovationsdilemma

Standortvorteil Datenschutz

Nachdem die neue Staatsministerin für Digitales bereits im Bereich des Datenschutzes aufhorchen ließ1, zieht auf zeit.de nun die Sphäre der SPD nach.

All diesen Prozessen ist eines gemeinsam: Daten spielen eine entscheidende Rolle. Die Gewinner des Kampfes um den Onlinewerbemarkt sind Unternehmen, die am besten mit Daten umgehen konnten und Zugriff auf viele davon hatten. […] Gewinner dieses Spiels werden Unternehmen sein, die gute Bedingungen für datengetriebene Geschäftsmodelle vorfinden, und Volkswirtschaften, die diese Bedingungen schaffen. Das zeigt die Entwicklung der letzten Jahre überdeutlich. Daraus abzuleiten, man müsse vor allem eine Liberalisierung in Bezug auf Daten herbeiführen und den Datenschutz beschneiden, wo es nur geht, ist sicherlich nicht richtig. Aber wenn der Grünen-Politiker Jan Philipp Albrecht sich in dem Dokumentarfilm Democracy als Held der europäischen Datenschutzgesetzgebung feiern lässt, ist Sorge angebracht, ob wir in Europa an den richtigen Rahmenbedingungen arbeiten.2

Das interessante: selbst die Wirtschaft ist sich – zumindest in Teilen – der Relevanz des Datenschutzes (Privacy) bewusst. “Business Software Alliance (BSA) bewertet Deutschland als den besten Standort für Cloud-Computing-Dienste”3; “Die DSGVO ist nicht wie befürchtet eine Innovationsbremse, die neue Geschäftsmodelle verlangsamt, sondern eine Möglichkeit, das Vertrauen von Verbrauchern gegenüber digitalen Diensten zu stärken. So wird aus Misstrauen letztlich Komfort.”4; “Data Privacy as European-Wide Competitive Advantage”5.

Man könnte nun von Seiten der Politik Innovation in Form “synthetischer Daten”6 7 fördern, und somit nicht nur einen Ausgleich zwischen den berechtigten Interessen von Unternehmen an Daten wie auch dem der Bürger an Privatheit finden, sondern zudem noch eine Rohstoff-Industrie in Deutschland schaffen. Statt dessen äußert Herr Noller hier weder einen originellen Gedanken, er ist vielmehr ein weiterer Hall im Echo der Innovationsbremsen und legt die Axt an einen Standortvorteil Deutschlands.

Im Zeitalter knapper Daten ist Datenschutz Sozialpolitik8.

  1. Zeit Online (2018). “Es geht viel, viel zu langsam”. Abruf unter http://www.zeit.de/digital/2018-03/dorothee-baer-digitalisierung-datenschutz.↩︎

  2. Noller, S. (2018). Doro Bär hat recht. Abruf unter http://www.zeit.de/digital/2018-03/digitalisierung-dorothee-baer-staatsministerin-csu.↩︎

  3. Nickel, O. (2018). Deutschland ist favorisierter Standort für die Cloud. Abruf unter https://www.golem.de/news/bsa-studie-deutschland-ist-favorisierter-standort-fuer-die-cloud-1803-133175.html.↩︎

  4. Kaupa, C. (2018). DSGVO im Internet der Dinge: Chance statt Schrecken. Abruf unter https://www.capgemini.com/de-de/2018/03/dsgvo-im-internet-der-dinge-iot-chance/.↩︎

  5. Wegner, S. (2016). Mastering the Big Data Challenge as a Telecommunication Operator, D&A Insights, Berlin.↩︎

  6. Wegner, S. (2015). Future Analytics — Fabrication of Synthetic Data, Data Natives, Berlin.↩︎

  7. Koperniak, S. (2017). Artificial data give the same results as real data — without compromising privacy. Abruf unter http://news.mit.edu/2017/artificial-data-give-same-results-as-real-data-0303.↩︎

  8. Seitz, S. (2018). Inequality. Abruf unter https://writings.grembl.de/inequality.↩︎

March 11, 2018 Data Economics

Innovation

One of the most important insights regarding innovation: it‘s reactive.

Innovation in Finance has been a reaction to lift financial constraints of individuals and organizations1. It is believed, that the human brain evolved as a reaction to volatility within the environment2. Researchers have documented how institutions are the reaction to environmental context 3.

Next to constraints, regulation is another impulse for innovation:

“The major impulses to successful innovations over the past twenty years have come, I am saddened to have to say, from regulation and taxes”. — Miller, in: Tufano:3184

As marvelous as bitcoin is, the arguments for it reveal a search for a solution as all the constraints within those arguments are already solved. What constraints does it solve? Bitcoin only makes sense if the government itself is seen as a constraint. Even autonomous driving will require insurance to make the case for it by pricing out individuals as human drivers are „so dangerous“5. Electric cars do not resolve some constraint, as long as prices for fossil fuels are subsidized by the externalization of their environmental impact.

Not only did state-financed research lay the ground for today‘s innovation6, a lack of regulation — as well as the mantra of deregulation in politics — have led western societies into stagnating productivity7 8.

Today’s lacking investment means that technology does not substitute for labour — the normal trajectory in capitalism, instead cheap labour substitutes for technology. — Denayer

Deregulation in general is not possible — rules define the system9. Behind the buzzword is just a mere transfer of regulatory power from the state to private corporations which results in volatility for citizens, externalization and applied innovation. Which is acceptable, in case of regulatory frameworks for accountability, informational transparency and competition as well as an sound institutional frameworks10.

It is time to accept, that politics is needed to set priorities for future development via fundings.

  1. Silber, W. L. (1983). The American Economic Review, Vol. 73, No. 2, Papers and Proceedings of the Ninety-Fifth Annual Meeting of the American Economic Association (pp. 89–95). American Economic Association.↩︎

  2. Townsley, G. (2013). Die Anfänge der Menschheit – Vom Affen zum Menschen. ZDF/ARTE.↩︎

  3. Mayshar, J., Moav, O., Neeman, Z. and Pascali, L. (2015). Cereals, Appropriability and Hierarchy. CAGE Online Working Paper Series 238, Competitive Advantage in the Global Economy (CAGE).↩︎

  4. Tufano, P. (2003). Chapter 6 – Financial Innovation. Handbook of the Economics of Finance, Vol. 1, Part A (pp. 1–604), Edited by Constantinides, G. M., Harris, M. and Stulz, R. M. Elsevier.↩︎

  5. Williams, R. (2017). Driverless cars: the arguments for and against. Access via https://inews.co.uk/news/technology/when-will-we-become-comfortable-with-driverless-cars/ [Feb 18 2018].↩︎

  6. Mazzucato, M. (2015). From Market Fixing to Market-Creating: A new framework for economic policy. Working Paper 2/2015. ISI Growth.↩︎

  7. Denayer, W. (2018). How inequality is evolving and why. Access via http://www.flassbeck-economics.com/how-inequality-is-evolving-and-why/ [Feb 11 2018].↩︎

  8. Kopf, D. (2017). Robots aren’t killing jobs fast enough—and we should be worried. Access via https://qz.com/1146747/robots-arent-killing-jobs-fast-enough-and-we-should-be-worried/ [Dec 8 2017].↩︎

  9. Meadows, D. H. (2009). Thinking in Systems - A Primer. 978-1-84407-726-0. Earthscan.↩︎

  10. Levine, R. (2005). Bank Regulation and Supervision. Access via http://www.nber.org/reporter/fall05/levine.html [Dec 30 2009].↩︎

February 18, 2018 Innovation

Inequality

A desired outcome for corporations is survival. To sustain in today’s volatile environment, corporations innovate1. Therefore as socio-cultural systems, corporations need to internalize information for growth2. Rules thereby define scope, freedom, and boundaries of systems3. Furthermore balancing feedback loops are needed for self-correction as are reinforcing feedback loops as sources of growth and explosion but also erosion and collapse4.

  1. The role of Finance for innovation and economic growth is acknowledged5. Financial Innovation creates new practices and instruments to lessen the financial constraints for corporations as for individuals6.
  2. In recent decades, within economic systems with varying modes of production, inequality has been growing steadily7. This is true for wealth as it is for income 8.
  3. Inequality hurts economic growth9.
  4. CapEx are low10. Yet financial capital is “super abundant”11.

As a matter we are in a time of low innovation. 12 13 Yet fundamental problems are known unknowns (eg. storage technology for sustainable energy sources) or a question of scaling.

Comparing table 1 in Silber’s 1983 paper with the present reveals the low degree of innovation within the financial sector 14. Or as argued elsewhere, for decades innovation within the US credit card industry has been the invention of more complicated and less transparent fee structures15. Just recently The Economist reported two research studies on signals of information sharing between government officials and banks.16

Recent inventions like CDOs or CDS have “promoted excessive financial intermediation by inducing investors to underestimate the risk of investments they were making. As a result, funding flowed in value-destroying activities.”17

The lesson of the 2008 crisis: finance really is a commodity. At its core finance is about time transformation, risk and lot size allocation. Thanks to algorithms, everyone can do that. Amazon does it, Square does it, Paypal does it, AirBnB does it. The reason not everyone is a bank, finance isn’t disrupted, is because it’s protected by the government and it’s supposed relevance to the system. But the system has changed, the arguments of banks against the “social cost” of stricter capital requirements were always neglect able18 19. Today they’re irrelevant especially compared to the social cost of more innovation like CDOs and less innovation because of excessive property rights within the regime of finance20.

Presently, and even more so in the future, growth in productivity requires data21 22 23 24. As a matter it is important to recognize the inequality, not in finance, but data. Income streams should be measured in data flows and data access. The amount of wealth equals the volume of data under ownership. Because politics is looking for the trees in finance, it cannot see the forest of data. The Gini coefficient of data flows and data storage should be measured. The possibilities of access to data, the ownership of data.

The inequality within the regime of finance is more and more a second-order effect of inequality in data25. Inequality in finance is just a matter of politics, knowledge transfer and allocation. Just like worldwide inequality of calories is. Finance isn’t unimportant, yet the abundance of financial capital begets manipulation as long as the inequality in the regime of data isn’t managed well.

The increasing sophistication and depth of financial [data] markets promote economic growth by allocating capital [data] where it can be most productive. The dispersion of risk [value] more broadly across the financial [information] system has, thus far, increased the resilience of the system and the economy to shocks.26

Whereas within the regime of finance humans were known as consumers, they’re now known as users. The hierarchy within society now polarizes along the dominance of data. And because current thinking limits users to data suppliers without property rights, society as a whole suffers the “curse of the resource”27.

Even within the regime of finance the value of data can be measured. Yet because of lacking accountability, misaligned property rights and the externalization of risk as proven by data leaks, feedback loops lead to the wrong attribution of value.

Following the history of oil and gas in the US, the current state resembles extractive anarchy in which actions by individual corporations go unrestrained28. The outcome is mistrust! Even more worryingly, as patents are vaguely formulated the risk of entrepreneurship increases and as matter excess in ownership rights hinders innovation29 30. Patents are important, they should remain31. Yet, for the time being and during the transformation property rights should be reformed and combined with smart regulation of corporate finance. Furthermore, in certain cases the government could mandate – for example – patent pooling or data flows through open interfaces32.

Property rights for data would eventually lead to less invasive products, as corporations would opt for synthetic data33 34 which would raise the value of human (and machine) created data and as a matter reduce inequality.

To summarize, humanity is presently in a transition where finance is a commodity but data not yet commodified35. And because of excesses on part respectively in favor of corporations, inequality is suffered by humans.

A further question could be: should data be commodified? If not, a completely new economic system with new modes of production is essential.

  1. Benner, M. J. and Tushman, M. L. (2003). Exploitation, exploration, and process management: the productivity dilemma revisited. Academy of Management Review, Vol 28, No. 2 (pp. 238–256). Academy of Management.↩︎

  2. Gharajedaghi, J. (2011). Systems Thinking: Managing Chaos and Complexity: A Platform for Designing Business Architecture. 3rd edition. 978-0123859150. Morgan Kaufmann.↩︎

  3. Meadows, D. (2008). Thinking in Systems: A Primer. 978-1603580557. Chelsea Green Pub Co.↩︎

  4. ibid.↩︎

  5. Silber, w. L. (1983). The Process of Financial Innovation. The American Economic Review, Vol. 73, No. 2, Papers and Proceedings of the Ninety-Fifth Annual Meeting of the American Economic Association (pp. 89–95). American Economic Association.↩︎

  6. ibid.↩︎

  7. Streeck, W. (2014). How will capitalism end?. New Left Review 87, May-June 2014.↩︎

  8. ibid.↩︎

  9. Cingano, F. (2014). Trends in Income Inequality and its Impact on Economic Growth. OECD Social, Employment and Migration Working Papers, No. 163. OECD Publishing.↩︎

  10. Denayer, W. (2017). The productivity puzzle explained. Access via http://www.flassbeck-economics.com/the-productivity-puzzle-explained-how-right-wing-policies-and-neoclassical-recipes-destroy-economic-growth/ [Feb 11 2018].↩︎

  11. Mankins, M., Harris, K. and Harding, D. (2017). Strategy in the Age of Superabundant Capital. Access via https://hbr.org/2017/03/strategy-in-the-age-of-superabundant-capital [May 6 2017].↩︎

  12. Kopf, D. (2017). Robots aren’t killing jobs fast enough—and we should be worried. Access via https://qz.com/1146747/robots-arent-killing-jobs-fast-enough-and-we-should-be-worried/ [Dec 8th 2017].↩︎

  13. Bloom, N., Jones, C. I., Van Reenen, J. and Webb, M. (2017). Are Ideas Getting Harder to Find?. Working Paper 23782. NBER.↩︎

  14. Silber, w. L. (1983). The Process of Financial Innovation. The American Economic Review, Vol. 73, No. 2, Papers and Proceedings of the Ninety-Fifth Annual Meeting of the American Economic Association (pp. 89–95). American Economic Association.↩︎

  15. Levitin, A. J. (2006). Payment Wars: The Merchant-Bank Struggle for Control of Consumer Payment Systems. Available at SSRN: https://ssrn.com/abstract=903140.↩︎

  16. The Economist (2018). Insider trading has been rife on Wall Street, academics conclude. Access via https://www.economist.com/news/finance-and-economics/21736561-one-study-suggests-insiders-profited-even-global-financial-crisis-another [Feb 12th 2018].↩︎

  17. Johnson, S. and Kwak, J. (2012). Is Financial Innovation Good for the Economy?. Innovation Policy and the Economy, Vol. 12, Issue 1 (pp. 1–16). NBER.↩︎

  18. Boissay, F. and Collard, F. (2016). Macroeconomics of bank capital and liquidity regulations. BIS Working Papers, No 596. Bank for International Settlements.↩︎

  19. Baker, M. And Wurgler, J. (2013). Do Strict Capital Requirements Raise the Cost of Capital? Banking Regulation and the Low Risk Anomaly. NBER Working Paper No. 19018. NBER.↩︎

  20. Van Dijk, M. A. (2013). The Social Costs of Financial Crises. Available at SSRN: https://ssrn.com/abstract=2278526.↩︎

  21. Drucker, P. F. (1999). Knowledge–Worker Productivity: The Biggest Challenge. California Management Review, Vol. 41, No. 2 (pp. 79–94). University of California.↩︎

  22. Davidson, D. (2015). The Rising Value of Information. Access via https://www.attensa.com/the-rising-value-of-information/ [Feb 2nd 2016].↩︎

  23. Weber, M. and Burkhard, A. (2017). Entscheidungsunterstützung mit Künstlicher Intelligenz. Bitkom e.V.↩︎

  24. Wissner-Gross, A. (2016). Datasets Over Algorithms. Access via https://www.edge.org/response-detail/26587 [Apr 30 2016].↩︎

  25. There more reasons, as outlined by Denayer (2017).↩︎

  26. Johnson, S. and Kwak, J. (2012). Is Financial Innovation Good for the Economy?. Innovation Policy and the Economy, Vol. 12, Issue 1 (pp. 1–16). NBER.↩︎

  27. Patrick, S. M. (2012). Why Natural Resources Are a Curse on Developing Countries and How to Fix It. Access via https://www.theatlantic.com/international/archive/2012/04/why-natural-resources-are-a-curse-on-developing-countries-and-how-to-fix-it/256508/ [May 1 2013].↩︎

  28. Libecap, G. D. and Smith, J. L. (2002). The Economic Evolution of Petroleum Property Rights in the United States. The Journal of Legal Studies Vol. 31, No. S2, The Evolution of Property RightsA Conference Sponsored by the Searle Fund and Northwestern University School of Law (pp. S589–S608). The University of Chicago Press.↩︎

  29. Arinas, I. (2012). How Vague Can Your Patent Be? Vagueness Strategies in U.S. Patents. HERMES - Journal of Language and Communication in Business, No. 48 (pp. 55–74). Royal Danish Library.↩︎

  30. EFF. Stupid Patent of the Month. Access via https://www.eff.org/de/taxonomy/term/11344.↩︎

  31. Moser, P. (2013). Patents and Innovation: Evidence from Economic History. Journal of Economic Perspectives, Vol. 27 No. 1 (pp. 23–44). American Economic Association.↩︎

  32. I think, X2A within the PSD II regulatory initiative serves as guidance for this idea.↩︎

  33. Koperniak, S. (2017). Artificial data give the same results as real data — without compromising privacy. Access via http://news.mit.edu/2017/artificial-data-give-same-results-as-real-data-0303 [Dec 13 2017].↩︎

  34. Wegner, S. (2015). Future Analytics – Fabrication of Synthetic Data. Data Natives 2015.↩︎

  35. Rushkoff, D. (Unknown). Commodified vs. Commoditized. Access via http://www.rushkoff.com/commodified-vs-commoditized/ [Mar 3 2015].↩︎

February 14, 2018 Economics The End of Politics

Filterblasen

Es quietscht und knarzt! Seit Jahren schon ist Kritik des Status quo allgegenwärtig, sie erfordert nicht mal mehr die “linken Spinner” 1 2 3 4 5 6 7 8 9 10 11 12 13 14. Doch die Joffes, die Poschardts, die Lindners dieser Welt, sie diagnostizieren einen Mangel von Rezepten der Vergangenheit15.

Der Eisberg: weit und breit nicht sichtbar! Vielleicht liegts an der knapp 13 prozentigen Schlagseite. Vielleicht an der eigenen Systemrelevanz16.

Wenn es irgendwo neoliberale Reformen gibt, hilft das unserer weiterhin innovativen, qualitätsversessenen Produktion. […] Die Schamlosigkeit von Trump, das eigene Land groß machen zu wollen, ist ebenso abstoßend wie inspirierend. […] [D]eswegen müssen jetzt schnell Wachstumshemmnisse abgeräumt werden: Bürokratie abgebaut, Steuern gesenkt, Restriktionen und Forschungsverbote aufgehoben werden. Es wird hart, doch von der sogenannten Linken bis zum DGB-Chef plappert man von neuen sozialen Wohltaten, Umverteilung und schürt mit dem Mythos von der aufgehenden Schwere zwischen Arm und Reich, jene leistungsfeindliche Dia-da-oben-Stimmung, die falscher ist denn je. — Ulf Poschardt in: Die Welt, Ausgabe vom 17. Januar 2017, Seite 1

Und so betrachtet man den Koalitionsvertrag des Jahres 2018: Union und SPD bemühen sich nicht einmal mehr um einen Neu- respektive Überanstrich. Sie schmeissen lieber Pflaster in Richtung der lautesten Knarzer. So vorhersehbar die Kardinalsünde des modernen neoliberalen Denkens 17, so deutlich die Signale der Gegenwart:

In 2013, a separate study in the Proceedings of the National Academies of Sciences estimated that between 0.7 percent and 1.75 percent of the world’s agricultural land was now being transferred to foreign investors from local landholders. […] The PNAS study found that foreign investors frequently buy tracts of land that have ample supplies of freshwater, through either local rainfall or underground aquifers. Water has become especially valuable given that supplies are increasingly under strain in countries like China, India, and the United States. 18

Glück auf, everyone!

  1. Abraham, J. (2017). Fossil fuel subsidies are a staggering $5 tn per year. Abruf unter https://www.theguardian.com/environment/climate-consensus-97-per-cent/2017/aug/07/fossil-fuel-subsidies-are-a-staggering-5-tn-per-year [10. August 2017].↩︎

  2. Campbell, D., Burger, D. und Wilson, C. (2018). Volatility Inc.: Inside Wall Street’s $8 Billion Mess. Abruf unter https://www.bloomberg.com/news/articles/2018-02-06/volatility-inc-inside-wall-street-s-8-billion-vix-time-bomb [10. Februar 2018].↩︎

  3. Guilford, G. (2018). The way the world catches fish defies all economic logic. Abruf unter https://qz.com/1195914/the-way-the-world-catches-fish-defies-all-economic-logic/ [8. Feb 2018].↩︎

  4. Harris, K., Kimson, A. und Schwedel, A. (2018). Labor 2030: The Collision of Demographics, Automation and Inequality. Abruf unter http://www.bain.com/publications/articles/labor-2030-the-collision-of-demographics-automation-and-inequality.aspx [8. Februar 2018].↩︎

  5. Jaumotte, F. und Osorio Buitron, C. (2015). Inequality and Labor Market Institutions. IMF Staff Discussion Note, SDN/15/14.↩︎

  6. Jordà, O., Knoll, K., Kuvshinov, D., Schularick, M. und Taylor, A. M. (2017). The Rate of Return on Everything, 1870–2015. Working Paper 2017-25. Federal Reserve Bank of San Francisco.↩︎

  7. Maclay, K. (2015). Study finds climate change will reshape global economy. Abruf unter http://news.berkeley.edu/2015/10/21/study-finds-climate-change-will-reshape-global-economy/ [20. Oktober 2016].↩︎

  8. Meneguzzo, F. und Pagliaro, M. (2016). The energy-population conundrum and its possible solution. arXiv:1610.07298v1 [physics.soc-ph].↩︎

  9. Ostry, J. D., Loungani, P. und Furceri, D. (2016). Neoliberalism: Oversold?. Finance & Development, June 2016 (pp. 38–41).↩︎

  10. Roberts, D. (2013). None of the world’s top industries would be profitable if they paid for the natural capital they use. Abruf unter https://grist.org/business-technology/none-of-the-worlds-top-industries-would-be-profitable-if-they-paid-for-the-natural-capital-they-use/ [10. März 2015].↩︎

  11. Rodrik, D. (2018). What Do Trade Agreements Really Do?. Abruf unter https://drodrik.scholar.harvard.edu/publications/what-do-trade-agreements-really-do.↩︎

  12. Sheffi, Y. und Lynn, B. C. (2014). Systemic Supply Chain Risk. The Bridge, Vol. 44, Issue 3 (pp. 22–29). National Academy of Engineering.↩︎

  13. Thompson, H. (2017). Building a Sustainable Political Economy. 978-3-319-52508-2. palgrave.↩︎

  14. Versicherungsbote.de (2017). Betriebsrente - Rentenfonds und -kassen fehlen bis zu 700 Milliarden Euro. Abruf unter https://www.versicherungsbote.de/id/4861648/Betriebsrenten-EIOPA-Stresstest/ [19. Dezember 2017].↩︎

  15. Entlernen als Kompetenz des 21. Jahrhunderts. Frei nach Max Planck: Eine neue wissenschaftliche Wahrheit pflegt sich nicht in der Weise durchzusetzen, daß ihre Gegner überzeugt werden und sich als belehrt erklären, sondern vielmehr dadurch, daß ihre Gegner allmählich aussterben und daß die heranwachsende Generation von vornherein mit der Wahrheit vertraut gemacht ist.↩︎

  16. Während Herr Poschardt für eine Fortführung des Status quo plädiert, lobbyiert Herr Döpfner – u.a. Chef der Welt Gruppe – für Regeln zum Erhalt seines Geschäftsmodells bei der EU Kommission. → Disruption: gerne! Aber bitte nur für die Anderen.↩︎

  17. Wikipedia (2018). William White (economist). Abruf unter https://en.wikipedia.org/wiki/William_White_(economist) [11. Feb 2018].↩︎

  18. Plumer, B. (2014). Why Wall Street investors and Chinese firms are buying farmland all over the world. Abruf unter https://www.vox.com/2014/11/20/7254883/farmland-trade-land-grab [16. Mai 2015].↩︎

February 11, 2018 Politics

Regimes

Scarcity plays an important role within economic thinking. Looking at history through the lens of scarcity reveals four regimes.

Scarcity Currency Resource
Life Calories Food
Natural Resources Land Grain
Machines Money Finance
Attention Time Data

Usually, society polarizes along the resource of a given regime. With scarcity of life, dominance of food lead to hierarchy. With scarcity of natural resources, dominance of land lead to feudalism and the aristocracy. Within the scarcity of means of production, along the lines of finance the working class was created. And within the scarcity of attention, the dominance of knowledge based on data analytics creates hierarchy within society.

December 12, 2017 Thoughts Human History Economics

Reductionism or consolidation

Civilization has created a wealth of information over past centuries, and as a matter new insights and knowledge — complexity grew and continuous to grow.

But modularization for complexity management, as presently handled, is at its limit. Following the “Ausdifferenzierung” (differentiation) of science — as a matter of information growth – all disciplines have diverged in language and Weltanschauung to a point were praxis and semantics are too loosely coupled as that progress could go ahead full steam.

Fundamental terms of society are ambiguous or subject to negotiation:

Norbert Wiener as well as Claude Shannon introduced a new and purely formal concept of information, which sidestepped the context and meaning of information to ensure computability. — Suchman and Weber

A first cluster of information concepts/theories — wherever you want to begin with — might be those that look upon information as a given. Sometimes this is called “potential” information or “structural” information. […] A second cluster focuses on the transmission aspect. Seen from that angle, information is not lying in the structure but that which is transmitted from a sender to a receiver via a channel that is disturbed by noise. […] A third and last cluster is that of the view of the receiver. Information is finally not that which is transmitted — pursuant to this perspective — but that which is processed by the receiver. It is the receiver who, by processes of decoding, is considered to attach a meaning to the message and to thereby produce “actual” information. — Hofkirchner

Put differently, human progress is subject not to consensus but compromise and opportunism (cf. Ioannidis) based on a few dominating insights. Insights are starting to haunt us: herding has been quite important in human history, yet today, it leads to system failure.

Even worse at present reductionists lead and leaders of society have decided that information hiding might be a good way to handle complexity. What we need is a phase of consolidation where fundamental insights are re-articulated or redefined (ie. hierarchy, heterarchy, and panarchy).

November 23, 2017 Human History Information