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The question that should be on our minds is: how are my household’s buffers holding up?

Lists of predictions for the new year are reliably popular. Here’s 10 predictions, there’s 17 predictions, over here we have 23 and a half… let’s strip it all down to one prediction: everyone’s predictions will be wrong because 2023 isn’t going to follow anyone’s script.

There are several reasons for this. One is that the vast majority of predictions are based on historical comparisons to previous eras. If the current era is unique in its combination of dynamics and instability, previous pathways are not going to accurately predict what happens next.

Recency bias leads us astray. The past 50 years of relatively mild weather, the past 40 years of Bull Markets, the past 30 years of financialization and the supremacy of monetary policy–all of these offer a warm and fuzzy confidence that the future will be comfortingly similar to the recent past. This assumption works pretty well in stable eras but fails dismally in destabilizing, transitional eras.

Stability and instability are not evenly distributed, so every cherry-picked bias can be supported. You predict slow sales? Here’s an empty shopping mall. See, I’m right! You predict a return to the good old days? Here’s a crowded street fair. See, I’m right!

Those who happen to be living inside an island of coherence are inside a bubble that they mistakenly think encompasses the entire world. This is especially prevalent in the top 5% who shape the narratives that influence the rest of us. If real estate is sinking in their little corner of the world, they predict real estate will crash everywhere.

If everything’s rosy in their protected enclave, they predict a mild recession and steady growth, blah blah blah.

…click on the above link to read the rest…

2022: The Year of Breakdown

December 31, 2021

2022: The Year of Breakdown

In other words, our economy and society have been optimized for failure.

If we look at the fragility and instability of essential systems, it’s clear that 2022 will be the year of breakdown. Let’s start by reviewing how systems break down, a process I’ve simplified into the graphic below.

1. Regardless of whether it was planned or not, all systems are optimized to process specific inputs to generate specific outputs. Each system is pared down to maximize efficiency as the means to maximize profits. This efficiency in service of maximizing profits requires trade-offs that only become visible when some key part of the system fails.

The system that ships containers around the world offers a useful example. Shipping containers revolutionized shipping and reduced costs by commoditizing containers (all standard sizes), container ships (specifically designed to carry thousands of containers and container ports with specifically designed cranes, docks and truck lanes / queueing.

It’s possible to load a container on some other craft with a jury-rigged crane, but the efficiency of that is essentially a fraction of the optimized system: the jury-rigged crane will only be able to load a handful of containers, the ship will only be able to carry a few containers, and the likelihood of the containers shifting increases.

The infrastructure and labor are both highly specialized. Calling out the National Guard to speed up container offloading is a useless gesture unless the Guard can deliver more cranes and experienced operators.

The greater the optimization, the greater the fragility as the breaking of any one link brings the entire system to a halt. Throwing in equipment and labor that the system isn’t designed to use will fail.

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

The Systems of Life – a MAHB Dialogue with Fritjof Capra, Systems Scientist and Author of The Tao of Physics

August 21, 2021

The Systems of Life – a MAHB Dialogue with Fritjof Capra, Systems Scientist and Author of The Tao of Physics

“Deep ecology does not see the world as a collection of isolated objects but rather as a network of phenomena that are fundamentally interconnected and interdependent. It recognizes the intrinsic value of all living beings and views humans—in the celebrated words attributed to Chief Seattle—as just one particular strand in the web of life.” – Fritjof Capra

Geoff Holland – Where life on Earth is concerned, are we at the beginning of the end or the end of the beginning?

Fritjof Capra – When we look at the long history of evolution, we realize that humans are latecomers to the Earth. If we compress the age of the Earth into the six days of the biblical creation story, we see that all visible forms of life evolve on the last day. The modern human species appears in Africa 11 seconds before midnight, and written human history begins around two-thirds of a second before midnight. Nature has sustained life for billions of years, and as latecomers, it behooves us to respect, honor, and cooperate with nature’s inherent ability to sustain life. Today, we have the knowledge, the technologies, and the financial means to do so. What we are lacking is political will and leadership.

GH – How do physics and meta-physics connect to become The Tao of Physics?

FC – During the first three decades of the twentieth century, a dramatic change of concepts and ideas occurred in quantum physics. The new concepts have brought about a profound change in our worldview; from the mechanistic worldview of Descartes and Newton to a holistic and ecological view…

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

Human Stupidity Explained: A Study Published on the Scientific Journal “Systems”

August 20, 2021

Human Stupidity Explained: A Study Published on the Scientific Journal “Systems”

The original representation (1976) of the four “quadrants of stupidity” according to Carlo M. Cipolla. Clockwise from the top left quadrant: the behavior of hapless, intelligent, bandits, and stupid people. According to Cipolla, stupid people are the most dangerous people in the world.

We (myself and Ilaria Perissi) just published a new study on human stupidity in the scientific journal Systems. It is an open-access paper and you can download it for free at this link. I had already announced this paper in a post this April as a preliminary version published on ArXiv. Now, it is a regular paper appearing in a regular journal.

Among other things, I can tell you that the experience of publishing this paper has been interesting (in the sense of the ancient Chinese malediction: may you live in interesting times!). It highlighted one of the many problems of the current system of scientific publishing: when you try to publish something that crosses the boundaries of established fields, you find yourself blocked by reviewers who find that it is their sacred duty to prevent your insults against orthodoxy from seeing the light of the day. But let me not harp on this.

So, what is the point of our paper? The paper is written in a light mood, but I think it makes an interesting point: what is the reason for human stupidity?

Let me explain: we all know that we are surrounded by stupidity: it truly pervades everything (the recent example of the end of the occupation of Afghanistan is just one of the many). This point had already been noted in the 1970s by Carlo Cipolla, an enlightened economist and historian. Cipolla had proposed “five laws of stupidity.”…

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

It’s About The System, Not The Individuals: Notes From The Edge Of The Narrative Matrix

July 31, 2021

It’s About The System, Not The Individuals: Notes From The Edge Of The Narrative Matrix

Listen to a reading of this article:

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If the working class had as much class solidarity as the ruling class has there never would’ve been a ruling class.

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Stealing someone’s labor is worse than stealing their property, because it’s theft of their life; you can replace property if you want, but you can’t replace hours of life. And rigging the system so people need to work longer hours in order to survive is this form of theft at mass scale.

Right now it’s ass backwards: people have to spend their lives away from their loved ones in pointless jobs, and if you tell the cop your employer stole hours from you he’ll just shrug while if your employer tells the cop you stole a company iPad you’ll be hauled off in chains.

This would all be a lot less confusing if we said people get paid by the Life Unit instead of by the hour, because it makes it much clearer what you’re actually trading. “You want a unit of my life for seven dollar bills and a quarter? Fuck you.”

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Six months into Biden’s presidency it’s definitely not okay to be a grown adult and still believe Trump was a uniquely monstrous president.

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Biden may be stopping all progress and breaking most of his campaign promises, but he did also campaign on bringing back the Obama years so in that sense he kept all his campaign promises.

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Focusing on individuals instead of the system creates the illusion that if you replaced the individuals you could fix the problems with the system. The individuals are symptoms of the disease.

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

Collapse Is A Process, Not An Event

September 20, 2020

Collapse Is A Process, Not An Event

How does one ‘get ahead’ during hard times?

Look, I’m a systems guy. I think in systems terms. You should as well.

Why?

Because we’re entering a period of time when the major systems that have supported humanity are going to fail.

Or, put more accurately: they are already failing.

As just one example, our monetary system delivers outsized gains to the already stupendously-wealthy while piling up massive debts on the backs of we citizens, both born and yet-to-be-born. The US Federal Reserve is the unelected and unaccountable body that is most responsible for have made America’s billionaires nearly $1 trillion ‘richer’ since the pandemic hit.

These next three Fed-related data points are, in a word, obscene.

The first shows that the US Federal Reserve now “owns” more US federal debt than all foreign central banks. The second shows how billionaires are getting grotesquely wealthier from the Fed’s “rescue’” efforts. And the last shows how the Fed’s record-low interest policy has resulted in an explosion in federal debt:

(Source)

This is obscene (and infuriating!) to anyone who cares about the future. Leaving aside the morality issues for a moment, we can at least conclude that the behaviors and values on display are thoroughly unsustainable.

Eventually spending more money than you have ends in ruin.

Speaking of spending what you don’t have, a similar story can be told about ecological overshoot and humanity’s extractive practices — it’s akin to spending both the entirety of the interest income as well as some principal each year from our environmental trust fund.

There aren’t many resources that one can point to which aren’t in some serious form of either concerning decline or depletion, or both. Already thousands, if not millions, of people in the American West are considering relocating because of the ever-present danger of disruptive if not life-threatening fires:

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

The school of economics as a suicide academy?

November 5, 2019

The school of economics as a suicide academy?

“Anyone who thinks that economic growth can continue for ever on a finite planet is either a madman or an economist.” Kenneth Boulding

The Limits to Growth Study of 1972

In 1972 economists became embroiled in a controversy with a group of systems scientists from the Massachusetts Institute of Technology and declared themselves the winners. It became the conventional wisdom that the economists won the argument. This complacent judgement now turns out to be premature.

The systems scientists had been commissioned by a group called the Club of Rome to research the impact of economic growth on the ecological system. Their book, published in 1972, was titled “The Limits to Economic Growth”. It argued that two things would set a constraint on the economic growth process – an accumulation of pollution and wastes and the depletion of resources. The damage from pollution – for example from greenhouse gases – would require the diversion of increasing amounts of resources to mitigate and adapt to increasing difficulties. At the same time depletion – eg of fossil fuels, oil, gas, minerals and biological resources – would mean that harder and costlier to access resources would have to be accessed as time went by and that would raise costs and choke off growth too. (1)

Crucially the LtG authors did not say that the Limits to Growth (LtG) constraints would be immediate – their modelling, done with early computer technology, dated the end of growth, followed by a period of involuntary contraction, in and after the first two decades of the 21st century. Quelle surprise – in recent years mainstream economists have been puzzling over what they call “secular stagnation”.

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

Why is Going Green So Hard? Because the System Isn’t

April 19, 2019

Why is Going Green So Hard? Because the System Isn’t

Every year around Earth Day, I’m reminded of papers I graded in an environmental sociology class. The assignment was to assess your values, explain how you thought you would live as an adult (about 20 years in the future), and then complete an online calculator to find out: If everyone in the world lived like you, how many planets would we need?

The students were all young and idealistic, and most of them cared deeply about the environment. In their papers, they professed how they would live their lives in the most sustainable ways possible — eating vegan diets, avoiding car travel, growing their own food, and so on.

Most were sure they’d find a way to make it work without sacrificing luxuries like international travel.

Then they calculated how many planets would be needed to support everyone in the world living with their ideal lifestyle. Every single student required more than one planet. Most needed about three.

That’s right: If everyone in the world lived like these idealistic, passionate environmentalists, we’d need three planets to produce enough resources for their needs.

These papers hit me hard emotionally. When I was their age, I was them. Their dreams were my dreams — only for me, those dreams are dead.

Even the most committed of them couldn’t get her environmental footprint down to what one planet can provide. There’s almost no way to live in the United States as it is now and be fully sustainable. Attempting to do so requires a constant, overwhelming amount of effort.

I know because I’ve tried to do it myself. It was exhausting, frustrating, and often unsuccessful.

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

Nothing Can be Reduced to a Single Cause & Effect be it Markets or Nature

January 31, 2019

Nothing Can be Reduced to a Single Cause & Effect be it Markets or Nature

QUESTION: Dear Mr. Armstrong,

Thanks for the Socrates forecast.

Just a question. What will possibly happen to existing Tropic Belt countries like my region South East Asia when the world is turning into global cooling? Any forecast?

Regards,

ANSWER: I am awaiting their data to run it through and see what comes out. This is what I mean about opinion. How can anyone forecast something without the data? What we do know is also that the Jet Stream moves up and down, so it would make sense that the Tropic Belt would also do the same. The Jet Stream has been dipping as well and creating a very diverse curve pattern. So this produced the COLDEST New Year’s Eve on record last year. This is also why you have people who want to claim it is irrelevant if people die of cold in Wales. They argue that since it is warm where they are in Canada, it must prove that Global Warming is real. They are not the brightest bulb in the box.

Then we have the Pacific Jet Stream. These people who always try to reduce any effect to a single cause should be barred from any research EVER!!! If you want to understand how interconnected our planet is then you also need to look at and study El Niño. The interconnectivity is similar to all the world financial markets, which create a level of complexity beyond most human’s ability to rationalize. Both the weather system and the financial system function on an extremely high level of complexity. The patterns and events in one place can affect life on the other side of the planet in both systems.

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

The World’s Fragile Economic Condition – Part 1

September 24, 2018

The World’s Fragile Economic Condition – Part 1

Where is the world economy heading? In my opinion, a large portion of the story that we usually hear about how the world economy operates and the role energy plays is not really correct. In this post (to be continued in Part 2 in the near future), I explain how some of the major elements of the world economy seem to function. I also point out some relationships that tend to make the world’s economic condition more fragile.

Trying to explain the situation a bit further, the economy is a networked system. It doesn’t behave the way nearly everyone expects it to behave. Many people believe that any energy problem will be signaled by high prices. A look at history shows that this is not really the case: fighting and conflict are also likely outcomes. In fact, rising tariffs are a sign of energy problems.

The underlying energy problem represents a conflict between supply and demand, but not in the way most people expect. The world needs rising demand to support the rising cost of energy products, but this rising demand is, in fact, very difficult to produce. The way that this rising demand is normally produced is by adding increasing amounts of debt, at ever-lower interest rates. At some point, the debt bubble created to provide the necessary demand becomes overstretched. Now, we seem to be reaching a situation where the debt bubble may pop, at least in some parts of the world. This is a very concerning situation.

Context. The presentation discussed in this post was given to the Casualty Actuaries of the Southeast. (I am a casualty actuary myself, living in the Southeast.) The attendees tended to be quite young, and they tended not to be very aware of energy issues. I was trying to “bring them up to speed.” This is a link to the presentation: The World’s Fragile Economic Condition.

Slide 1

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

The changing narrative – A new ontology for the progressive movement?

September 13, 2018

The changing narrative – A new ontology for the progressive movement?

Have you ever wondered why the world works like it does? Why things seem skewed in favour of the rich and the powerful and why our so called ‘democratic’ systems seem so inherently unjust? Why we have rampant inequality, poverty, hunger and accelerating species extinctions and runaway global warming?

The answers are not simple because these problems are systemic.

The system within which we operate gives rise to the terrible outcomes listed above. But the outcomes are the expected, emergent behaviour of ‘managing’ our planetary affairs in the ways we do. They are the direct results of the way humanity has chosen to handle concepts like ownership, governance and economics.

We can sit around asking “why aren’t things getting better?” and protesting against the status quo but, ultimately, mitigating the outcomes and effects of a system which works in a certain way is like sticking plasters on a severed limb. It will never help. It might make the patient, and the helper, feel good in the short term but it will never address the underlying issues.

As Buckminster Fuller so eloquently proposed: “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”

So, in an attempt to address the problems with the present system by ‘building a new model’, a few years ago some brave colleagues and I embarked on a systemic mission:

Our aim was to co-create an increasingly democratic, equitable and sustainable society. Our mission was to normalize a worldview that was conducive to achieving our aim.

There are some important specifics in that mission. We took our anger at the present system and identified that “a new model” would not work without a compatible “world view” or “ontology”.

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

How Things Fall Apart: Extremes Aren’t Stable

September 10, 2018

How Things Fall Apart: Extremes Aren’t Stable

A funny thing happens on the way to stabilizing things by doing more of what’s failed: the system becomes even more unstable, brittle and fragile.

A peculiar faith in pushing extremes to new heights has taken hold in official circles over the past decade: when past extremes push the system to the breaking point and everything starts unraveling, the trendy solution in official circles is to double-down, pushing even greater extremes. If this fails, then the solution is to double-down again. And so on.

So when uncreditworthy borrowers default on stupendous loans they were never qualified to receive, the solution is to extend even more stupendous sums of new credit so the borrower can roll over the old debt and make a few interest payments for appearance’s sake (also known as “saving face.”)

A funny thing happens on the way to stabilizing things by doing more of what’s failed: the system becomes even more unstable, brittle and fragile.

Central banks and states have latched onto a solution akin to a perpetual-motion machine: the solution to all problems is simple: print or borrow another trillion. If the problem persists, repeat the print/borrow another trillion until it goes away.

Consider China, a nation (like many others) dependent on a vast, never-ending expansion of credit. So what happens when defaults start piling up in the shadow banking system? The central bank/state authorities conjure up a couple trillion yuan (a.k.a. liquidity) so defaults go away: here, Mr. Bad-Risk-Default, is government-issued credit so you can pay off your defaulted private-sector loan. Everybody saves face, private losses have been transferred to the public sector/state, problem solved.

Small banks over-extended and technically insolvent? Solution: print or borrow another trillion and give the insolvent bank the dough. Problem solved!

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

Here’s How Systems (and Nations) Fail

July 27, 2018

Here’s How Systems (and Nations) Fail

These embedded processes strip away autonomy, equating compliance with effectiveness even as the processes become increasingly counter-productive and wasteful.

Would any sane person choose America’s broken healthcare system over a cheaper, more effective alternative? Let’s see: the current system costs twice as much per person as the healthcare systems of our developed-world competitors, a medication to treat infantile spasms costs $8 per vial in Europe and $38,892 in the U.S., and by any broad measure, the health of the U.S. populace is declining.

This is how systems and nations fail: nobody chose the current broken system, but now it can’t be changed because the incentive structure locks in embedded processes that enrich self-serving insiders at the expense of the system, nation and its populace.

Nobody chose America’s insane healthcare system–it arose from a set ofinitial conditions that generated perverse incentives to do more of what’s failing and protect the processes that benefit insiders at the expense of everyone else.

In other words, the system that was intended to benefit all ends up benefitting the few at the expense of the many.

The same question can be asked of America’s broken higher education system:would any sane person choose a system that enriches insiders by indenturing students via massive student loans (i.e. forcing them to become debt serfs)?

Students and their parents certainly wouldn’t choose the current broken system, but the lenders reaping billions of dollars in profits would choose to keep it, and so would the under-assistant deans earning a cool $200K+ for “administering” some embedded process that has effectively nothing to do with actual learning.

The academic ronin a.k.a. adjuncts earning $35,000 a year (with little in the way of benefits or security) for doing much of the actual teaching wouldn’t choose the current broken system, either.

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

Population growth and food: A systems perspective

July 12, 2018

Population growth and food: A systems perspective

In this age of the Anthropocene, it is necessary to look inward as well as outwards to find systemic solutions. People may or may not be “a plague on earth” as David Attenborough has stated, but we are without doubt the dominant force on this planet. Some introspection is needed if we are to use our power ethically.

As Organisational Outreach Officer for Population Matters, my task is to contact ethically-oriented organisations (from faith organisations to environmental NGOs) and suggest ways in which the issue of population growth could be covered on their website and integrated into their ethos. Many organisations I approach agree that population size contributes to climate change, conflict and malnutrition, but they frequently respond by saying that the issue lies outside of their remit. Population Matters’ patron Jonathon Porritt talks about the reasons why organisations avoid referencing population growth in this 14-minute video, debunking a few myths along the way.

To be truly systemic, one has to include all aspects of the problem. So what is ‘systemic’ or ‘systems thinking’? In simple terms, it is an approach for analysing complex issues by viewing them holistically, as purposeful systems containing interdependent variables, stakeholders and perspectives. This allows an awareness of one’s own bias and limitations. Systems practitioners use simplified diagrams to uncover key issues and when this is done comprehensively they are able to see the interwoven social, economic, political and environmental dimensions.

The issue under investigation here is the global food system, the purpose of which is to feed humans (and to a certain extent livestock) over a sustained period of time. It is embedded in and dependent on ‘macro’ systems as shown in the diagram below.

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

Systems Thinking and How It Can Help Build a Sustainable World: A Beginning Conversation

July 11, 2018

Systems Thinking and How It Can Help Build a Sustainable World: A Beginning Conversation

In Brief

Humanity stands at a precipice. Overpopulation, resource scarcities, degraded ecosystem functioning from pollution and biodiversity loss, and anthropogenic climate change are damaging the life-supporting capacity of the planet. Diminishing returns on fossil fuel energy investments, combined with their dwindling availability and environmental harm, threaten industrial civilization. Many people recognize the need to transition to sustainable, resilient ways of living, but the prospect of such a transition is daunting, not only from a logistical perspective, but also because it requires new ways of thinking about and addressing complex problems. Widespread adoption of systems thinking represents one of society’s best bets for making real progress towards this daunting transition, but few actually understand what it is. This article is intended to introduce systems thinking into our common lexicon – to explain what it is at a basic level, how it can be used, and why it may very well be the key to humanity’s survival over the long run.

“For some, the development of systems thinking is crucial for the survival of humanity.” – John Sterman

“The light begins to twinkle from the rocks:
The long day wanes: the slow moon climbs: the deep
Moans round with many voices. Come, my friends,
’Tis not too late to seek a newer world.”
– Alfred Lord Tennyson, Ulysses

Let’s start at the very beginning. What is a system?

A system is a set of things interacting in a way that produces something greater than the sum of its parts. Systems can range in complexity. Compare, for instance, a car, which is relatively easy to understand and even diagnose when something goes wrong, to a tropical rainforest, which contains so many living and nonliving components that we’re only just beginning to understand how they work.

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

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Our aim was to co-create an increasingly democratic, equitable and sustainable society. Our mission was to normalize a worldview that was conducive to achieving our aim.

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