Primary production is the foundation for everything in the consumer arena. There is no other option. You can’t make something out of nothing. That is the lesson from nature and given that we ultimately are a part of nature, we are subject to the same rules. In a practical sense, what does this mean?
Corals like this one, are symbiotic with algal cells inside their bodies, and they also eat plankton.
This morning I woke up with these thoughts buzzing around in my head, so I thought I would jot them down.
Zero is a state of being, it is not like -1 or +1 which are actual numbers. If I have a cookie and my brother takes away my cookie, the cookie still exists, it is just that I don’t have it. So I don’t have zero cookies, I am merely in a state of zero cookies, but that could change if I take the cookie back from my brother. If he beats me to it and eats the cookie before I can grab it back, the cookie still exists, it has just changed state (and I don’t want it anymore).
Zero always has a context. The scale on a thermometer in Celsius degrees registers a zero at the point of transition between ice and water, it is not a place where there is no temperature. Suppose I start with a box of ten shiny pebbles. If I remove 9 pebbles, the box has 1 pebble left, but I have 9 pebbles in my hand. If I remove the last pebble, the box has zero pebbles in it, but I have all ten pebbles. So there are never zero pebbles except in the context of the box.
Now money is different. It is not real, it is representational. So I can be at a state of -$1,000 and still have lots of actual dollar bills in my wallet. And I can still buy things using the money in my wallet. However, being in a state where I am both -ve and +ve means I am unstable. Whereas with cookies, I either have the cookie or I don’t.
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A useful prediction from the ecosystem model of the economy is that an optimum degree of taxation will lead to an optimum level of diversity of lucrespecies in the system and an optimum use of the various resources, in this case including people who are not entrepreneurs or capitalists.
In the US Republican campaign we hear a great deal of complaining about the excessively high tax rates in the US and a suggestion on the parts of all the Republican candidates that they will bring down the tax rates. A quick look at this map demonstrates that the US already has one of the lowest tax rates as a percentage of their GDP of any country in the world.
Predicting the outcomes of the IMF and World Bank measures to be imposed on Greece based on an ecological rather than evolutionary economic model leads to some surprisingly different predictions than what the IMF and World Bank predict publicly.
Good science begins with a question which is then examined by the development of one or more hypotheses, each of which can be falsified by a test that can actually be carried out. For example a question might be: “Are all red things hot?” Is this a testable hypothesis? “All red things are hot.” Suppose we test by asking several thousand people if they agree with the hypothesis. We discover that 98% of the people we asked said yes, all red burners are hot and only 2% said no they are not all hot. Does this mean we have tested the hypothesis? Because the vast majority of people believe that all red burners are hot, does that mean all red burners are hot? Not in science. Opinion is of no value in science. Belief is of no value in science. In science only evidence matters. In the rest of life, opinion and belief can matter, but not in this test. In fact, our test of asking people’s opinion is not even a real test because we still have no idea if all red burners are hot.
Suppose we test by taking the temperature of thousands of red burners and find that they are all hot. Does this “prove” the hypothesis? Nope! If we test another one, it might be cold. Supposing instead we create the hypothesis that states: “Red is what makes a burner hot.” Now we can test it by painting a burner red. If the burner does not get hot, then redness does not cause hotness. OK, so that is a testable hypothesis because we can carry out an actual test to falsify it. The problem with the other test is that we would never know if we had examined every red burner.
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It is always easiest to start with something obvious and relatively small in scale.
Maybe we could start with slavery. Humans aren’t the first to do this of course, ants have been at it for literally millions of years. The simplest approach is to invade colonies to steal eggs or larvae, which they either eat or raise as slaves. Others attack to choose only the biggest and strongest adult workers. Sometimes the attacks are sneaky. The marauding queen slips past the battling workers and kills the defending queen. The killer queen smears herself with the dead queen’s phermones (kind of like perfume) to fool the local workers. The attacked colony then marches off behind the disguised queen to what will become their slave quarters. The slavemaking ant workers guard the slaves and maintain their eggs and larvae in slave hatcheries to make more slaves. The guards chase down and forcibly return any would-be escapees. The purpose of slavemaking is to expand the colony’s ability beyond what their own workers could perform.
Picture of a slave-ant
Clipart courtesy FCIT
Sometimes the slavemaking is taken to the extreme, such as in some Amazon ants, where the ants can no longer do any work by themselves — they can’t even feed themselves. Without slaves the colony would fail.
Is there a good example of slavemakers in modern human times? Yes, even today in many countries slaves are still used. But I want to look at a particular situation that is parallel to the ants.
The United States, like many countries in the world routinely used slaves to expand the performance of the colonies beyond the ability of the US local workers. Slave labour in the US probably became common sometime around 1650. Mostly but not entirely in the south, they came from Africa where slavemaking people invaded African villages to steal the children to be raised as slaves. Others attacked the villages to choose only the biggest and strongest adults to become slaves. Continue reading
The following summarizes the key ideas that shape the manner in which the concept of nature and biology as actual or metaphorical factors governing economics. Hobbes began to distinguish between artificial and natural aspects of human behaviour.
John Locke
Given that people have tried to manage biological species, ecosystems, and biomes without sparkling success, it is doubtless likely that it will be equally difficult to manage lucrespecies, econosystems and economes. At the same time, it would be incorrect to suggest that all efforts to manage biological systems at some level have been total failures. A better description would probably be to suggest it is possible to influence biological systems.
Early attempts to manage wild animal species for improved and yet sustained harvest made the assumption that in most animals there is a overabundance of young. The best mathematical treatment of this was developed in Canada by Bill Ricker in 1954 (“Stock and recruitment,” J. Fisheries Res. Board Can., 11, 559-623). His model was simple in concept and elegantly easy to implement. I have simplified it immensely but in essences it goes like this. Each animal in a stable system needs to replace itself in its lifetime. All animals produce more young than is necessary to replace themselves. If the environment has more carrying capacity that the fish are using, the population grows. If the population is stable, the number of young surviving to adulthood equals the number of adults in the population. By harvesting adults, we can cause the population to increase the rate of survival to adulthood. By harvesting only the equivalent of the excess young, we can take the “maximum sustainable yield.” This was too aggressive and over the years, the regulations shifted to “optimum sustainable yield”, then this was too aggressive so they shifted to regulating the harvest based on the previous harvests and their trends. Ricker recognized the limitations of the idea, and made these comments: “Plotting net reproduction (reproductive potential of the adults obtained) against the density of stock which produced them, for a number of fish and invertebrate populations, gives a domed curve whose apex lies above the line representing replacement reproduction. At stock densities beyond the apex, reproduction declines either gradually or abruptly. This decline gives a population a tendency to oscillate in numbers; however, the oscillations are damped, not permanent, unless reproduction decreases quite rapidly and there is not too much mixing of generations in the breeding population. Removal of part of the adult stock reduces the amplitude of oscillations that may be in progress and, up to a point, increases reproduction.” This assumes a constant carrying capacity.
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Milton Friedman
We also defined the ecological base for economics, and this is a much more accurate model in predicting observed results in a capitalist system (a class of economic systems). This is because the competition in an ecosystem operates at the level of the individual entrepreneur, so that the individual reacts to and attempts to adjust to the conditions and competitors. At this level of competition it is the survival of the fittest individual entrepreneur or corporation, not the fittest set of genes in a group of entrepreneurs. The strategy of capitalism is to use the capital assets of a number of entrepreneurs to dominate the market by controlling the production and distribution of products so that the entrepreneurs can engage in an exchange of wealth. This strategy in an ecosystem model leads to the most successful corporations becoming larger either at the expense of others or by acquiring them or by merging with them. Fairly quickly, if there are no controls, only a few very large and generalized corporations will control most of the production and distribution in the entire econosystem. Continue reading
Let me recap the thinking so far. Economic evolution is a spontaneous undirected long-term process, stretching back at least 100,000 years. The process is one in which each type of economic system gradually developed. The next new system sprang from the previously existing species. The actual historical record of the times for the ancient evolutionary events are not easy to define, but archaeological evidence might suggest a shift from subsistence to bartering sometime about 70,000 years ago. Shortly after that it is likely that the earliest mass production of tools or tool parts began. As the trade become more intensely developed based on bartering, someone no doubt thought about representing a purchase so that it could be “ordered” and delivered later. Money and monetary systems probably were pretty well established at about the time the shift from nomadic, semi-nomadic, and migratory life styles intensified the agricultural aspects with a shift to primarily monetary systems perhaps 10,000 years ago. Massive accumulations of wealth by chiefs and rulers became too repressive for peaceful acceptance by the general population. Revolutions reduced the incidence of feudalism and dictatorships, allowing the potential for individual ownership. Although economic evolution still proceeds, just like biological evolution, it is too slow for us to see it happen in a lifetime.
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Assuming we can continue the metaphor of biology and economics, the next stage is to identify major economes (parallel to biomes). The three major variables describing the typical conditions in which major economic systems are located and which by observation seem to determine the richness of the system are the latitude, the amount of biological cover from forest to desert, and the amount of infrastructure that has been built into the system. The infrastructure must in part be physical, but can also be connectivity in various ways from simple communication to secure banking operations.
Within each of the major economes, the productivity of the area and its sustainability as a series or constellation of economic systems within the econome is largely dependent on the amount of terraforming that has been done, the degree to which built infrastructure (physical or intangible) has been developed, and the degree to which the local economic system adds value to the resource locally.
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An organic matrix in a biological ecosystem ecosystem is when part of the complexity of the environment is structurally the result of living organisms. The thesis in this blog is that a similar commercial matrix will enhance the diversity of lucrespecies.
A matrix as used in this context is a supporting or interweaving mechanism. A physical matrix in an ecosystem can be a variety of things, but in the simplest terms it is added complexity in the physical environment that allows more species to find ways to survive than would be able to survive without that complexity. A simple example is that a rocky shoreline and intertidal zone has a much greater diversity of species than a sandy beach and intertidal zone. The reason is in part because a rocky shore has more things to hang onto and more places to hide.
An organic matrix in an ecosystem is a living or once-living physical structure that adds physical complexity and because it is a living structure, it can interact with the other organisms in the system, adding further levels of potential habitat niches in the environment. In a previous blog, I mentioned examples such as coral reefs (coral and calcareous algae structures), forests (trees) and kelp forests (Kelp stands).
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Ecological systems are observed associations of species in specific environments or regions. Without insisting on a slavish copy of this concept to economic systems, it is important that the elements of an ecosystem and an econosystem remain at least parallel or the benefits of the predictive nature of ecosystem theory will be lost to the econosystem. To that end, let’s return to the species/lucrespecies parallel. A biological species is a population of individuals with similar characteristics that reproduce more like individuals. A lucrespecies is analogous in that it is a population of entrepreneurs with similar characteristics and that tend to create more entrepreneurial entities that are of similar characteristics. I previously chose the example of the biological species of human beings (Homo sapiens) as analogous to the lucrespecies of car manufacturers. In these two analogous species, the individuals are respectively people, like you, and corporations, like Honda and Toyota.
So to look for and distinguish different econosystems, like different ecosystems, one must look for assemblages of lucrespecies in specific socio-political environments or geographic regions. In a previous blog, I mentioned some terrestrial ecosystems. Without doing too much imagining, if I ask you to visualize a tropical savannah I am sure that in your mind you see rolling plains of grass and shrubs mixed with isolated low trees and herds of large herbivores. I also imagine you would not have much trouble telling me what is the top predator. This is a relatively simple ecosystem by comparison let’s say to a tropical rain forest. Can you as easily tell me what the major herbivores are in a tropical rain forest? Or what the top carnivores might be in a South American rain forest? This is a much more complex ecosystem with many more and much smaller species in general than a tropical savannah. A tropical desert is even less complicated, although probably less familiar.
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I present here a working hypothesis of the evolution of economies. The basis for the evolutionary hypothesis is as much practical as it is based on an extensive review of the literature. The review I did do certainly provided much food for thought, but there seemed not to be a coherent thread based on a single principle as is found in biological sciences. This despite the fact that much of today’s ideological fervor centres on Milton Friedman’s and others attempts to link capitalism to Darwinian evolution and even uses the phrase “survival of the fittest.” In fact, it is not analogous to evolution, but instead to ecosystems. Earlier attempts by Hyak can be excused for making this egregious error because concepts of ecology were not developed yet. It remains true however, that Friedman seemed not to examine with any rigour the predictions of an evolutionary model of the economy with the observed behaviour of economies. He certainly lived into the era of ecological thought.
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All of these are spontaneous self-starting processes. When we look at “evolution” we know to look at the many types of species and their evolutionary relationships, in today’s view, genetic phylogeny. When we look at “ecosystems” we know to look at the patterns of species diversity and distribution. So they are not the same viewpoint, but they are made up of the same things. When we look at economies, I am willing to bet most people do not separate the two major aspects of the economies — the range or diversity of types of economies and their evolutionary relationships derived over very long periods of time and in addition the patterns of economic species diversity and distribution in a region.
Natural evolution has no ultimate goal, no defined milestones, no direction, and no purpose. The results of evolution are on-going rudderless experiments. Each element in the experiment has only two major objectives, survive and reproduce. Organisms respond to the entire range of conditions that make up their environment. Natural selection is a blind tool choosing those genes that allow individuals to survive and reproduce best. Only one species would exist were it not for naturally occurring variation. Diverse conditions lead to diverse species. While there is no natural management of evolution, there are well-known examples of artificially managed evolution. Continue reading
The classification of ecological types and zones into major terrestrial biomes is as follows:
Each of these biomes has a special set of physical conditions within which it exists. The naming is essentially derived from those physical characteristics and the most important types of primary producers that are found there.
The classification of economic types is … well all over the map.
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