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Subject:
Post-industrial era is going to be amazing!Date: Sat, April 25, 2015 2:17 pm
To: "Armstrong Economics" <
armstrongeconomics@gmail.com>
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You have to understand that decentralized experimentation is extremely resilient and can not spiral into total destruction of information. If you show me you are putting on your thinking cap and being more open minded to reason, then I will explain to you analytically why this is the case. It has to do with the fact that spread of local experimentation encounters friction when propagating to global change (e.g. individual taste and circumstance is a friction), i.e. local degrees-of-freedom don't convey probabilistic global information; whereas, the incentives in top-down, collectivized control is self-reinforcing to 100% global coverage, i.e. the friction reduces over time. Moveover it is because the universe has no external vantage point and everything is relative, thus there is no way to define the distinction between information and noise on the whole.
In the evolutionary error threshold theory thought-experiment (not real world, and really just masturbation junk science), the hypothetical (not real world) mutation rate is ramped up from centralized, top-down control. In the free market, no one can say whether the information is being created or destroyed because there is no absolute point to measure from.
What you need to understand, that iexperimentation doesnt matter, if you have succesfully reached the optimal, you need to defend it.
After experimentation comes implementation, and if you fail you are wiped out. And this is what efficiency is all about and this determines who persists. So here comes the whole collectivism charade...
Even in networks the paths that have less friction are chosen regardless of the connectivity ( dof), Eventualy patterns that achieve efficiency records will be replicated and thus lower entropy even if the number of nodes is high and connectivity is high. Agents will always try to maximize efficiency not entropy, even in the knowledge age.
Information is neither destroyed neither created
There is the information content of the environment, there is the information an agent knows about the environment, there is the information an agent knows about itself, there is the information the agent doesnt know about the environment (environment entropy) and there is the information about itself an agent doesnt know (internal entropy), *so entropy is in the eye of the beholder, not actual quantity anyways.* do we agree on this?
You are drawing me back into the high IQ, generative essence discussion. I doubt this will be productive for most readers, but I will oblige you briefly in hopes of perhaps making a breakthrough in mutual understanding.
It is true that before the Knowledge Age, the economic incentives (i.e. efficiency in your incorrect nomenclature most economic != most efficient) in the free market were aligned towards a consolidation of stored monetary capital, and since we know the (Max Webers canonical definition of the) State controls legal tender through its monopoly on force, this enabled the stored monetary capitalists and State to collude against the People (e.g. oligarchies, monopolies, regulatory capture, etc). The capitalists and the government officers are populated by sociopaths due to the incentives of the power vacuum of control/power we give to our representative government, and we even have a DEEP STATE now behind the curtain for example funded with $trillions that Donald Rumsfeld admitting was missing from Defense budget on the eve of 9/11 (with all evidence and investigators so conveniently destroyed at the Pentagon the next morning by the
airplanemissle impact).
However, the Knowledge Age alters the fundamental incentives because production will require predominantly the individuals knowledge and not stored monetary capital. And this knowledge is not transferable nor aided by finance, i.e. knowledge production (not static knowledge but the creation of new knowledge) is not fungible the way manual labor is (see my quoted essays below for the reason).
Autonomous actors in the free market in the Knowledge Age will attempt to maximize their knowledge, but therein is the more crucial distinction from the Industrial Age. An individual can not buy nor take with force another individuals knowledge. The reasons are explained below in the quotes of my essays.
The only way to aggregate more knowledge in the Knowledge Age is to leverage the knowledge of other experts, i.e. maximizing the division-of-labor.
Knowledge capital will still be non-uniformly distributed (and perhaps even power-law distributed as for monetary capital due to difference in hypermotivation of A-listers compared to B-listers), but the crucial distinction is that it cant be used as means of theft with force on the collective.
Sorry your ideas are antiquated now and must be retired. Stop being a dinosaur!
Path of least resistance, i.e. most degrees-of-freedom, is not necessary the most efficient even though it may be the most economic. This is because Coasian barriers create economic incentives which are misaligned with maximum efficiency. The 2nd Law of Thermo tells us that the trend of entropy is to maximum, thus efficiency is precisely that which holistically maximizes entropy. Any other definition is hopelessly specialized and insufficiently general.
Discussions about entropic frame-of-reference, referential transparency, and closed systems will have to wait because that is going to require me to get much deeper than I want to write today.
Nonsense on information being conserved. The universe is trending towards maximum entropy. Changes in entropy are generally an irreversible process.
Energy is conserved but efficiency increased or decreased. That proves my definition of efficiency. ▮Q.E.D.
See the pre-Knowledge Age was enslaved by energy conversation. Unlocking unconserved information growth enables the exponential scaling of network effects.
The world is about to change so dramatically that is going to blow your fucking mind! That is why
the old world is dying into a one-world reserve currency enslavement paradigm. It is toast. The Knowledge Age is going to obliterate it.
OROBTC you are really wasting your time with your archaic value of gold.
One reason that readers have this cognitive dissonance is because they conflate the power wielded by corporations in the capitalist system with free markets in general. Yes it is true that the Industrial Age required large stored monetary capital and only a very small component of individual knowledge capital, thus power was naturally centralized amongst those who could enslave society with money. But the Knowledge Age changes the natural outcome of the free market, because the incentives are realigned by the fact that the primary cost of production has become the indivduals knowledge.
My thesis is that the Knowledge Age (we are leaving the Industrial Age) reduces the demand for stored monetary capital and increases the demand for stored knowledge capital. The Industrial Age (which is moving towards 0 or negative profit margins in China) required large amounts of fixed capital investment, thus a high demand for stored monetary capital. The factory worker and factory engineer are economically insignificant compared to the NAV capital costs of the factory infrastructure.
Whereas the high profit margins are moving towards the knowledge production sector (software programming, marketing, etc). The Industrial Age is dying economically and along with it will die the demand for stored money. The larger the capital, the less effectively one will be able to invest it with a positve ROI.
Thus we don't need crypto-currency to be a reserve currency. Let the oligarchs (and the socialist sheeople/masses) have their reserve currency and enslaved nation-state governments. That is all part of the process of that paradigm dying.
The Knowledge Age will rise with competing crypto-currencies.
Bitcoin will not "winner take all". I guarantee you that.
Instead of playing into the elite's goals with his Solutions Conference. Armstrong as a programmer should be helping us to create crypto-currency solutions.
Specifically the way to counter the worse effects of the one-world currency are to study my writings about the Knowledge Age which were linked from the opening post of this now 45 page forum thread.
You will probably need a week or two of studying the thread slowly.
I will be the first to admit I needed a week to fully absorb the following works of AnonyMint.
The Rise of KnowledgeUnderstand Everything Fundamentally Together these are quite simply the most insightful piece of economic theory I have ever read.
If the author is right and I think he is we are all in the midst of a tragedy of epic proportions. It is sad unstoppable and will devastate the lives of much of humanity.
http://unheresy.com/Information%20Is%20Alive.html#Thought_Isn%27t_Fungible
The Industrial Age relied on large economies-of-scale for manufacturing, which meant that fixed capital investments and NAV calculations sufficed for investment. The world was structured around a fixed return on capital model. This meant that large capital could find economies-of-scale for investment.
The Knowledge Age destroys all that! Big passive capital becomes dumb and impotent. Active capital (actual knowledge) is required in the Knowledge Age.
Thus those who invest in the reserve currency unit-of-account are in a dying paradigm. That one-world currency and eventual failure of the nations into a one-world government will be paradigm of death and eugenics (exactly as predicted in the Bible).
What is rising to take its place is... The only solution to this problem is for
the Knowledge Age to rise and say "I don't need stored monetary capital, I need knowledge". I will quote from myself about this as follows.
The Rise of KnowledgeFinanceability of Knowledge
As explained in the Economy of Knowledge and Energy of Knowledge sections, knowledge doesn't exist now if it isn't dynamically adaptable in the future. The only systems in nature which can do this, are those that are composed of autonomous agents without top-down control, e.g. ant colonies, the neurons and synapses of the human brain, free markets, and unregulated social networks.
Due to aggregating and concentrating capital via an interest rate, as opposed to dispersing and scattering capital, finance mathematically must over time reduce the quantity of autonomous decisions (at least decisions about who receives funding to produce). Thus if financing were the predominant long-term trend, knowledge could not be.
The more potential energy in the knowledge capital, the more priceless it is sell its future. There are knowledge producers such as the creator of the open-source software movement, who absolutely refuse to work at any price where they don't have sufficient ownership of their knowledge, so as to prevent limitations of its potential future use. Due to the transactional cost Theory of the Firm which provides for the economic existence of the corporation, corporate capital accumulates by defending or increasing the transactional cost between otherwise autonomous knowledge producing actors. Thus increasing corporate control of knowledge is the antithesis of increasing knowledge. Knowledge can only increase by increasing the autonomy of the knowledge producing actors. This tension is depicted graphically.
Thus, finance and corporations are inherently ownership centralization paradigms. Whereas, knowledge ownership can not be centralized without destroying it.
For example, if a corporation purchased a huge library of software modules or books, written by different authors, the managers could create nothing with this without the authors (or others) who are knowledgeable of these modules or books. If these authors were not already organically interacting, then they would not be able to at any price, unless there was interoperability knowledge potential enumerated by some knowledgeable person(s). Thus always the knowledge is owned by the knowledge producers. When a knowledge producer is gone, the knowledge previously produced is destroyed, if it was not adopted by another sufficiently knowledgeable producer.
The Inverse Commons explains that unlike sharing of hard resources, the sharing of knowledge increases the value of the shared knowledge. Current knowledge becomes more valuable as it gains more future potential uses, and only autonomous knowledge actors can maximize diverse use cases of interoperability.
Software has minimal financing requirements, e.g. one or two humans with computers can write software that launches a $millions start-up. I did this once or twice by myself with no employees (e.g. CoolPage.com by 2001 if in Shadowstats inflation-adjusted dollars).
Knowledge Investing
Since the ownership of knowledge can't be transferred with money, financing incurs the risk of guaranteeing knowledge to spontaneously create itself where it did not already exist. No level of guaranteed interest rate can compensate for this lack of knowledge in the act of financing. What attracts savers to be passive capitalists is the economy-of-scale, where the due diligence effort (i.e. knowledge production) applied does not rise significantly with the amount saved (i.e. loaned) at interest. The collective politics will guarantee (insure) the return by debasing the money as necessary to pay for the lack of knowledge production another evidence that financing is a centralization paradigm because knowledge can't be owned with money.
Whereas, equity investment has no guaranteed return and requires knowledge production.
Equity investments that are based on consistent dividends, are essentially a low knowledge production investment decision with a semi-guaranteed return similar to financing. It is instructive to note that as of 2008 No stockholder has made a real inflation-adjusted penny in equity in Coca-Cola in 46 years..
Passive capitalists will find it nearly impossible to venture into high-tech knowledge investing, because they necessarily must approach it from the financing perspective, as their objective is to deploy large quantities of capital passively, i.e. to approach the theoretical constant marginal utility of gold. For example, Buffett's BYD (which makes electric cars) investment has performed poorly. A scientifically knowledgeable person knows that the energy-density of batteries is not ROI competitive with petrol.
One general rule for investing in knowledge production, is to invest close to what you know well. Because knowledge is inherently local and autonomous. If there is some popular investment theme, then it must have a very low relative knowledge production the extreme case is depositing money in the bank, where the depositor doesn't even care how the money is invested.
The creator of the open-source software movement enumerated some business models that apply to knowledge production. The general concept is to not own the preexisting base of knowledge (it is always owned by the individuals and can't be transferred with money), rather to create a market for the services of the preexisting knowledge producers. In short, top-down fund some incremental advance in knowledge production and own the market for it. Remember that in the Theory of the Firm, corporations only exist where there is a transactional cost (barrier) to the autonomous knowledge producers achieving the same market organically. So the key is to identify these market barriers and invest to solve them.
Passive capital is financing those hard resources in the internet space, e.g. the massive server farms that serve the billion users of Facebook and Google, funded by collecting ad revenue rents on all internet activity an implicit attempt to make knowledge capital subservient. Yet given the non-autonomous top-down control of thousands of knowledge producing employees, and the requirement to defend the transactional cost that sustains the corporate profit, Facebook and Google can't produce software diversity fast enough to service all the features that users want. Diversified software start-ups will flourish.
