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How Systems Break: First They Slow Down

How Systems Break: First They Slow Down

Alternatively, we can cling to a state of denial, and the dominant system will be replaced by archetypal systems that are not necessarily positive.

Understanding our current socio-economy as a system of sub-systems enables us to project how and when unsustainable sub-systems will finally unravel.

The reality that cannot be spoken within the conventional media is that all the primary financial systems we believe are permanent and indestructible are actually on borrowed time.

One way to assess this decline of resilience is to look at how long it takes systems to recover when they are stressed, and to what degree they bounce back to previous levels.

A compelling article on this topic was recently published by The AtlanticNature’s Warning Signal: Complex systems like ecological food webs, the brain, and the climate all give off a characteristic signal when disaster is around the corner.

“The signal, a phenomenon called “critical slowing down,” is a lengthening of the time that a system takes to recover from small disturbances, such as a disease that reduces the minnow population, in the vicinity of a critical transition. It occurs because a system’s internal stabilizing forces—whatever they might be—become weaker near the point at which they suddenly propel the system toward a different state.”

Recent email exchanges with correspondent Bart D. (Australia) clued me into theDarwinian structure of this critical slowing down and loss of snapback (what we might characterize as a loss of resilience).

Beneath the surface dominance of one system are many other systems that are suppressed by the dominant system.

As the dominant system weakens / destabilizes / slows down, these largely invisible systems compete to occupy more of the ecosystem.

…click on the above link to read the rest of the article…

Flowing Toward Abundance

Flowing Toward Abundance

The wood comes from another neighbor’s multi-acre eucalyptus grove. Some of the trees are huge—three or more feet in diameter, a hundred feet tall. The landowner, Lyn, can pull out seven or eight properly chosen big trees each year and still replace all that biomass in the next year’s growth. It strikes me as a sustainable yield. Several neighbors rely on her for their winter wood; the lot pumps out a good fifteen cords a year, and in our mild climate, you can heat a 2000-square-foot house using only wood by burning about a cord and a half.

The point of my little tale is this: My neighbor with the giant woodpile is thinking that the most secure source of wood is the store of it in his yard. But—to put it in systems language—that’s focusing on stocks over flows. We tend to do that in this culture. However, the real wood storage is the woodlot in Lyn’s yard: the standing, growing trees, getting bigger each year, healthy and enlarging rather than rotting and getting punky on the ground.

…click on the above link to read the rest of the article…

It Just Doesn’t Matter

It Just Doesn’t Matter

When an avalanche is about to descend upon you, does it really matter which snowflake was the penultimate cause?

While it’s interesting (in a mental masturbation kind of way) to debate the genesis of a pending market collapse, environmental chaos, or energy cliff, in the end, it really doesn’t matter–unless, of course, we are able to curtail the impending crises by correctly identifying the variable(s) involved and mitigating the consequences, but the likelihood of that outcome is looking increasingly unlikely as systems are prone to overshoot and collapse.

One of the ‘insights’ I’ve had over the past several months as I read the competing narratives that are floating about the globe and attempting to ‘explain’ why the dilemmas we are facing are happening is that we really don’t understand complex systems and the way they behave, so we are bound to cling to simple explanations that support our personal biases and reduce the cognitive dissonance that results when our belief system is challenged.

A large part of the problem, I believe, in discerning which variable(s) play(s) the most impactful role in creating a crisis is the tendency for various interest groups to spin the ‘facts’ to support their particular narrative.

For example, whether the cause of the oil/commodity price collapse is the role of central banks in manipulating the economic system, the limits to growth, overproduction (by Saudi Arabia? US shale? Canadian oil sands?), and/or economic contraction (global? Europe? China? emerging markets?), the result is a loss of thousands of jobs, domestic unrest, and increasing geopolitical tension as nations try to counter the deflationary collapse that appears to be resulting. Many Western politicians and journalists are pointing the finger at the production levels of the Middle East, particularly Saudi Arabia, and their ‘refusal’ to cut production, but data from the past decade shows that supply has increased significantly because of US shale and Canadian oil sands extraction rather than that of Saudi/ME. It strikes me that this ‘spin’ is simply a means of avoiding looking in the mirror and deflecting attention–blaming ‘others’ for our woes is a common means of reducing cognitive dissonance, focusing citizen outrage away from their ‘leaders’, and justifying particular actions/decisions.

In the end, however, the ’cause’ is not that important to the families crushed by a sudden loss of income. And that brings me to the conclusion of this little diatribe: being prepared for whatever comes our way is the only thing that might really matter. Whether at an individual, family, or local community level–I don’t believe it’s possible or prudent to worry much beyond these–being resilient and resourceful in the coming months/years is what is going to make a difference as to how ‘successful’ one can deal with the coming dilemmas.

Best of luck to everyone. I think we’re going to need it.

Steve


In the 1979 comedy, Meatballs, actor Bill Murray provides a ‘motivational’ speech to his fellow summer camp counsellors and campers who are getting soundly beaten in a ‘friendly’ competition by a neighbouring camp: https://www.youtube.com/watch?v=6UZvIZAHjlY. In the end, the speech is seen not as motivational but as a message that, in the bigger picture, the competition really doesn’t matter–(SPOILER ALERT) all the good-looking girls are going to go out with the other camp’s counsellors anyways because they have all the money!

Manipulation = Fragility

Manipulation = Fragility

In markets distorted by permanent manipulation the most powerful incentive is to borrow as much money as you can and leverage it as much as you can to maximize your gains in risk-on asset bubbles.

A core dynamic is laying waste to global financial markets: the greater the level of central bank/government manipulation, the greater the systemic fragility.

There are a number of moving parts to this dynamic of steadily increasing fragility.One key characteristic of this fragility is that it invisibly accumulates beneath the surface stability until some minor disturbance cracks the thinning layer of apparent stability. At that point, the system destabilizes, as it has been hollowed out by ceaseless manipulation, a.k.a. intervention.

One is that any system quickly habituates to the manipulation, that is, the system soon adds the manipulation to its essential inputs.

For example: if you lower interest rates to near-zero, the system soon needs near-zero interest rates to remain stable. Raising rates even a mere percentage point threatens to fatally disrupt the entire system.

Another is that permanent intervention (i.e. manipulation, or to use a less threatening word, managementstrips the system of resilience. When participants are rescued from risk by central bank/central state authorities, they take bigger and bigger gambles, knowing that if the bet goes south, the central bank/state will rush to their rescue.

One of the core sources of resilience is a healthy fear of losses. If you’re going to face the consequences of your actions and choices, prudence forces you to either hedge your bets or diversify very broadly, so if bets in one sector go south you won’t be wiped out.

Thanks to the permanent manipulation of central banks and states, trillions of dollars have concentrated in high-risk, high-yield carry trades that are now blowing up.

…click on the above link to read the rest of the article…

 

What Choice Do We Have?

What Choice Do We Have?

As systemic solutions fall short, we must grasp the nettle of making our own arrangements in a time characterized by burgeoning demands and diminishing resources, capital and security.

The idea that our large-scale problems could be fixed with systemic reforms is enticing: replace the thousands of pages of tax code with a simple flat tax without deductions, for example, or the replacement of too big to jail/fail banks with community-owned banks that served the public, not shareholders.

But the attraction of reforms is a siren song, because our system is run by vested interests for vested interests, period. Any real reform is Dead On Arrival (DOA) because any real reform threatens the swag and security of vested interests.

One person’s livelihood is another person’s vested interest.

Toss in The Enchanting Charms of Cheap, Easy Credit and Our Spoiled-Brat Economyand we have a toxic resistance to systemic reforms that require any degrowth, direct democracy, writedowns of debt, devolution of centalized power, i.e. any real reforms of the unsustainable status quo.

So where does that leave us? With no choice but to submit? No, it leaves us with private solutions, by which I mean arrangements made on the individual and household level that do not assume the unsustainable status quo will magically continue to issue us our “we wuz promised” share of the swag.

Private solutions subdivide into practicalities (securing multiple income streams, choosing where to live, arranging access to healthcare, food and energy, proximity to friends and family, like-minded colleagues, etc.) and what we might term self-fulfillment: aligning our internal goals, priorities, personality traits, values and skills with the practical externalities of daily life.

Longtime correspondent Bart D. recently responded to an email in which I expressed the all-too common sense of being overwhelmed–by work, duties, responsibilities.His response gives us a starting place for choosing our priorities and goals:

 

…click on the above link to read the rest of the article…

Collapse Part 3: No Institutional Path to Contraction

Collapse Part 3: No Institutional Path to Contraction 
Collapse is not an event, it is a process.

One poorly understood source of collapse is the lack of pathways to contraction and a reduction of complexity/cost. The only pathway that is clearly marked is the one to expansion–of production, debt, credit, government, income, benefits, costs and complexity: more agencies, more regulations, more committees, more staff, more of everything.

The path to less complexity, less debt, less production and a contraction of the entire system doesn’t exist in most institutions.

Many dismiss any talk of collapse as mere fear-mongering. This is a legitimate issue to discuss, for if we focus exclusively on the lurid horrors of being killed by a shark in open water (for example) while ignoring the much higher risks of being killed by falling off a ladder at home, we have distorted the risks of accidental death and done a disservice to our understanding of various risks.

But collapse is not an event, it is a process. As a result, systemic collapse doesn’t lend itself to statistical calculations of probability. Processes are driven by dynamics, not odds.

So those dismissing any discussion of collapse as mere fear-mongering are doing a disservice to our understanding of processes–or lack thereof. One interesting feature of collapse is that it can result from either a choking over-abundance of complex, costly processes or a complete lack of essential processes, conceptually and practically.

Which brings us to the process that is lacking virtually everywhere–the process of contraction: shrinking the system, income, headcount, complexity and being productive with less of everything.

The corporate world offers many examples of what happens when the process of contraction and reducing complexity does not exist: companies buckle, fold and go bust. The world’s corporate darling Apple experienced this precise death-spiral in 1996-1997 before the company’s board brought Steve Jobs back as CEO. (So tentative was the board that Jobs was appointed “interim CEO.”)

…click on the above link to read the rest of the article…

 

 

 

 

Collapse, Part 1: Greece

Collapse, Part 1: Greece

When systems are broke and broken, collapse is the only way forward.

The theme this week is collapse. It’s a big, complex topic because there are as many types of collapse as there are systems. Some systems appear stable on the surface but collapse suddenly; others visibly decay for decades before finally slipping beneath the waves of history, and some go through stages of collapse.

The taxonomy of collapse is broad, and each unsustainable system (i.e. a system that will fail despite claims to the contrary) has its unique characteristics.

Which brings us to Greece.

 

I have written extensively about Greece and the doomed financial arrangement known as the euro for many years–for example: Greece, Please Do The Right Thing: Default Now (June 1, 2011).

When Debt is More Important Than People, The System Is Evil (February 18, 2012)

Greece at the Crossroads: the Oligarchs Blew It (January 27, 2015)

Greece and the Endgame of the Neocolonial Model of Exploitation(February 19, 2015)

When Europe Gets Greece’s Jingle Mail: Dealing with Default (May 15, 2015)

With the bankruptcy of Greece now undeniable, we’ve finally reached the endgame of the Neocolonial-Financialization Model. There are no more markets in Greece to exploit with financialization, and the fact that the mountains of debt are unpayable can no longer be masked.

Europe’s financial Aristocracy has an unsolvable dilemma: writing off defaulted debt also writes off assets and income streams, for every debt is somebody else’s asset and income stream. When all those phantom assets are recognized as worthless, collateral vanishes and the system implodes.

The peripheral nations of the EU are effectively neocolonial debtors of the core, and the taxpayers of the core nations are now feudal serfs whose labor is devoted to making good on any loans to the periphery that go bad. (see chart of Greece’s debtors below)

…click on the above link to read the rest of the article…

 

 

Planetary Boundaries and Human Prosperity

Planetary Boundaries and Human Prosperity

The future of humanity will depend on mastering a balancing act. The challenge will be to provide for the needs of more than ten billion people while safeguarding our planetary life-support systems. Recent scientific insights have made us better equipped than ever to strike that balance. Doing so will be our generation’s great task.

Ending poverty has become a realistic goal for the first time in human history. We have the ability to ensure that every person on the planet has the food, water, shelter, education, health care, and energy needed to lead a life of dignity and opportunity. But we will be able to do so only if we simultaneously protect the earth’s critical systems: its climate, ozone layer, soils, biodiversity, fresh water, oceans, forests, and air. And those systems are under unprecedented pressure.

For the last 10,000 years, the earth’s climate has been remarkably stable. Global temperatures rose and fell by no more than one degree Celsius (compared with swings of more than eight degrees Celsius during the last ice age), and resilient ecosystems met humanity’s needs. This period – known as the Holocene – provided the stability that enabled human civilization to rise and thrive. It is the only state of the planet of which we know that can sustain prosperous lives for ten billion people.

But humans have now become the single largest driver of ecosystem change on earth, marking the start of a new geological age that some call the Anthropocene. Scientists argue over the exact starting point of this epoch, but it can be dated to somewhere around 1945, when modern industry and agriculture began to expand briskly. In the future, geologists will see telltale markers like radioactive carbon – debris from nuclear blasts – and plastic waste scattered across the planet’s surface and embedded in rock.


Read more at http://www.project-syndicate.org/commentary/environment-boundaries-human-prosperity-by-johan-rockstr-m-and-kate-raworth-2015-04#tOJwRqXxsP1puGFf.99

 

The systems view of life – a unifying vision (part 2)

The systems view of life – a unifying vision (part 2)

In this episode I have the great honor of connecting with scientist, educator, activist, and author Fritjof CapraP.hd. He was born in Vienna, and studied physics and systems theory, and became well known for his first book,The Tao of Physics (1975). In this book, and in his subsequent work, he has explored the ways in which modern physics has changed our worldview from a mechanistic to a holistic and ecological one. Synthesizing various schools of thought and practice has been on of his prime interests. Together with his friend and colleague Professor Pier Luigi Luisi, who has also been a guest on this show, he has published a groundbreaking book titled the Systems View of Life – A Unifying Vision (2014). We base our dialogue on the perspectives put forth in this book, and with a special emphasis on how his work ties into that of Arne Næss and deep ecology. Also, I’m glad to announce that Capra will be in Norway May 19, at the University of Nordland, Bodø. He will also conduct a 6-week teaching tour through Europe in relation to the publication of his book, so check his schedule for more information on this. Feel free to contribute with your own reflections below the interview, and please share this resource with people who might be interested.

(4:00) Ove Jakobsen and ecological economy
Connecting to the Norwegian context, Capra mentions his friendship with Professor Ove Jakobsen at the University of Nordland, Bodø. Jakobsen has been an important advocate for ecological economics, or circular economics, and it’s this dialogue and exploration they intend to investigate further when they meet in May. Capra points out that the ideas embedded in the systems view of life correspond in many ways to what Jakobsen has found out in his own field of study.

…click on the above link to read the rest of the article and listen to the podcast…

 

 

Going Rogue: 15 Ways to Detach From the System

Going Rogue: 15 Ways to Detach From the System

I am inspired by the very definition of self-reliance: to be reliant on one’s own capabilities, judgment, or resources. Ultimately, it is the epitome of independence and lays the groundwork of what we are all striving for – to live a life based on our personal principles and beliefs.

It is a concept rooted in the groundwork  that made America great. Being dependent on our own capabilities and resources helped create a strong, plentiful country for so long. That said, the existing country as it is now is entirely different than when it began.

Why Are We So Dependent?

It is much too complicated to get into how the “system” was created. That said, the purpose is to enslave through debt and to create an interdependence that will force you and your family to never truly find the freedom you are seeking. It manipulates and convinces you to continue purchasing as a sort of status symbol to make you think you are living the good life; while all along, it has enslaved you further. Wonder why we have all of these holidays where you have to buy gifts? The system needs to be fed and forces you into further enslavement. If you don’t buy into this facilitated spending spree, you are socially shamed.

Collectively speaking, the contribution from our easy lifestyle and comfort level has created rampant complacency and a population of dependent, self-entitled mediocres. We no longer count on our sound judgement, capabilities and resources. The system keeps everything in working order so we don’t have to depend on ourselves, and furthermore, don’t want to.  I realize that many of the readers here do not fall into this collectivism, as you see through the ideological facade and know that the system is fragile and can crumble.

 

…click on the above link to read the rest of the article…

It’s Time to Get Serious About Systemic Solutions to Systemic Problems

It’s Time to Get Serious About Systemic Solutions to Systemic Problems

It’s getting harder and harder to be an optimist. A deep economic crisis has given way to a profoundly unequal recovery. Climate catastrophe is steadily unfolding across the globe. And the work of building a racially inclusive society appears to be stalled — indeed, in many areas, to be losing ground. All of this in an age of unprecedented technological progress, which has manifestly failed to keep its promises. If there is one saving grace, it is that the pain caused by these interconnected failures make it possible — for the first time in modern history — to pose the question of system change in a serious fashion, even in the United States, the faltering heart of global capitalism.

To pose the system question means first and foremost to point out that long, failing trends are anchored far more deeply in political-economic structures than conventional political debate suggests. It is to ask how the system is built, for whom, and how it operates to recurrently produce the decaying outcomes we are experiencing. There is, in fact, no shortage of people today to tell us that something is wrong, that things are built to work for the wealthy, for the white and for those far from the frontlines of climate and social calamity. Such diagnoses are increasingly commonplace and harder and harder to contest.

It is no major leap from such anguished complaints to recognition that the system itself –American corporate capitalism — is generating the outcomes we witness; that we do, indeed, face a systemic challenge, one manifestly not responsive to traditional political approaches and strategies.

…click on the above link to read the rest of the article…

 

 

ENERGY-MONEY EQUILIBRIUM: THE VALUE OF MONEY IN THE AGE OF OIL

ENERGY-MONEY EQUILIBRIUM: THE VALUE OF MONEY IN THE AGE OF OIL

Trying to figure out exactly how Money achieves and holds its value is very difficult. In all but the simplest systems, which are little more than Barter, you quickly develop a level of complexity which is confounding mainly because it is always so self-referential. In this exercise I try to elucidate the process used over the centuries to not just create money, which is primary, but also to control money once created. I have some basic ideas here, but I have no idea how this post will come out in the end. It’s a very difficult problem.

Starting Point: You cannot have Money without a surplus in basic needs, but neither is surplus by itself sufficient. You also must have control over at least one basic conduit of wealth, which is in the beginning food. Why is this so?

First let us look at a pre-agricultural Hunter Gatherer (H-G) society. Said society can be in surplus, but they don’t need or use money because each member of the society can take from the surplus as much as he or she needs. You may barter things, but you do not need an intermediary of money to do that. It’s a very simple system, but it allows for virtually no savings and none are necessary so long as you always have and expect surplus. A small group of H-Gs in a large territory who are not competing with others are always in surplus. So no money develops in such a society.

 

…click on the above link to read the rest of the article…

“Global System Catastrophe” Is Key Threat To Human Civilization

“Global System Catastrophe” Is Key Threat To Human Civilization

 – Oxford Scientists Cite “Global System Catastrophe” Among 12 Plausible Threats To Civilization

– “Global System Catastrophe” More Of A Possibility Than Most Western People Suspect

– Study Described As A “Scientific Assessment About The Possibility Of Oblivion”

– Other Threats Include Nuclear War, Environmental Degradation, Geological Events and Out of Control Technology

Recent research undertaken by scientists in Oxford University to identify possible threats to human civilisation has identified “system-wide failures caused by the structure of the network” as one of twelve major threats.

goldcore_bloomberg_chart1_23-02-15

Global economic collapse, artificial intelligence and nanotechnology have been named alongside nuclear war, ecological catastrophe and super-volcano eruptions as “risks that threaten human civilization” in a report by the Global Challenges Foundation.

The world’s economic and political systems face systematic risks because of their intricate and interconnected natures. The researchers say more work needs to be done to clarify what parts of the system could collapse and destroy western civilization.

The authors of the study say it is about “how better understanding of the magnitude of the challenges can help the world to address the risks it faces, and can help to create a path towards more sustainable development.”

The foundation was set up in 2011 with the aim of funding research into risks that threaten humanity, and encouraging more collaboration between governments, scientists and companies to combat them.

Apart from failure of the systems of civilization the report also looks at the threats posed by the following:

 

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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