Uncommon Sense

August 5, 2008

Opportunism Costs

Filed under: thinking — Derek @ 8:16 pm

In 1969, in his ‘brutally objective’ look at the human animal, The Human Zoo, Desmond Morris wrote:

“We have, in our relentless social progress, gloriously unleashed our powerful inventive, exploratory urges. They are a basic part of our biological inheritance. There is nothing artificial or unnatural about them. They provide us with our great strength as well as our great weaknesses. What I am trying to show is the increasing price we have to pay for indulging them and the ingenious ways in which we contrive to meet that price, no matter how steep that price becomes. The stakes are rising all the time, the game becoming more risky, the casualties more startling, the pace more breathless. But despite the hazards it is the most exciting game the world has ever seen. It is foolish to suggest that anyone should blow a whistle and try to stop it. Nevertheless, there are different ways of playing it, and if we can understand better the true nature of the players it should be possible to make the game even more rewarding, without at the same time becoming more dangerous and, ultimately, disastrous for the whole species”

Desmond may well have added all species had he not been focused on humanity, but let us not nitpick and ignore his vision…

EF Schumacher added his voice in his 1973 landmark book, Small is Beautiful, never quoted in Economics textbooks because it exposes the irrational core of Capitalism like a rapier:

“…one of the most fateful errors of our age is the belief that the problem of production has been solved. This illusion is mainly due to our inability to recognise that the modern industrial system, with all it’s intellectual sophistication, consumes the very base on which it has been erected. To use the language of the economist, it lives on irreplaceable capital which it cheerfully treats as income: fossil fuels, the tolerance margins of nature, and the human substance.”

“…the idea of unlimited economic growth, more and more until everybody is saturated with wealth, needs to be seriously questioned on at least two counts: the availability of basic resources, and, alternatively or additionally, the capacity of the environment to cope with the degree of interference implied”

“If human vices such as greed and envy are systematically cultivated, the inevitable result is nothing less than the collapse of intelligence”

More than 30 years later, you do not need to be an academic to see that these visionaries, among others, were ignored. Why? I believe it is due to dynamics deep within the human condition, and instead of developing strategies to reduce their effect, we have instituted systems that reinforce and entrench them. The cost has been severe, and will continue to be so, until we develop new ways of thinking about value.

“Progress”, said GK Chesterton, “is the comparative for which we have not settled the superlative”. The Utopian state exists only in our dreams, defined loosely in a wish list of circumstances and activities and there is by no means consensus on the detail. We have no notion of an objective purpose towards which existence is aimed, but we nevertheless strive towards our surrogates, the ends which motivate our actions, a set of means that are inevitably in conflict because they are mutually exclusive.

Progress in one part of the world as a result of “inventive exploration” is often paid for somewhere else in the world. Technological progress, the type that places demands on resources like fossil fuels, human health and nature, is extremely expensive, and we now see that those who reap the benefits do not necessarily foot the bill for all of the costs involved. In fact, in many cases, those who have almost no technology are paying in desperation in the form of poverty, disease and disaster, the effects of local resource utilisation on behalf of those half a planet away, and many orders of magnitude apart in standard of living. This does not include the increased dependence of the local inhabitants on the remote demands, placing them at the mercy of their remote masters. Opportunity cost is built into reality; prosperity does not occur in a vacuum, and we are becoming more and more aware that the planet is a closed economic system, astoundingly complex because it is an open system in respect of it’s exposure to changes in political, climatic and ecological systems. A case in point is the disaster in Myanmar, where the creation of shrimp trapping areas necessitated the removal of the mangroves, ultimately discarding a line of defence against water that would have saved many lives. The shrimps were not for locals; they were for export to another place far far away. The ‘invisible hand’ stretches out, and becomes clawed…

The notion of financial independence is a myth which exists only in text books. We live in an interdependent reality, not in our own little worlds, although some people behave as if they do.

Perhaps they suffer from Tiny Universe Syndrome. It’s a term I coined to describe people who actually believe that when they prosper, when they act in a manner that distributes resources towards themselves, that this is a ‘contribution’ to society. How so? Distribution towards oneself is necessarily away from the whole, not towards the whole. There is no guarantee that any ‘contribution’ is made in order for such a distribution to take place. If there were, it would in any case have to have taken place prior to the distribution, however that may take place. One cannot argue that because one has ownership of resources that one must have made a contribution. The two ideas are not dependent in any manner.

But the Syndrome has a second aspect which may be more damaging to society. It is the notion that this distribution is somehow ‘just’, that the person ‘deserved’ their good fortune. Given the inequities of skill potentially available to the players in a given economic system, the differences in initial resource bases, the existence of innumerable external forces and the tenuous nature of life itself, one would not only have to live in a tiny universe, but also have a tiny mind, to accept this article of faith as true. It belongs in the land where the Unicorn, The Easter Bunny and the ‘Self-Made Man’ frolic.

Wholes and Parts. As part of his brilliant trilogy on the human condition, Arthur Koestler wrote, in Ghost in the Machine (1966), of holons. A holon was something that had the characteristic of being a whole and a part at the same time. It was a whole when looked upon as the sum of it’s parts and a part when looked upon as a component of the holon ‘above’. And so the largest holon is composed of parts which are holons, which are composed of parts which are holons, all the way down, the hierarchy of systems thinking. It is a useful way of thinking about the nature of complex systems.

Eli Goldratt and Eli Schragenheim developed the Theory of Constraints in the 1980’s, which in the business world has revolutionised production management, project planning and implementation, and strategic thinking. The core of the theory is not really a new idea, having been around in the form of linear programming since the 60’s. In essence, the theory states that at any point in time in any complex system, since all the parts are interdependent, there will be a constraint or bottleneck that will affect the performance of the entire system. So the performance of any single part is only important if that part is the bottleneck at that point in time. If a part is not the bottleneck, it’s performance is only important to the degree that it impacts on the bottleneck’s performance. If we regard the optimum performance of the ‘top holon’ as the system’s purpose, then we would say that we seek a global optimum, i.e. the performance of the whole is more important than the performance of any of the parts. We could then say that the performance of a non-bottleneck ‘sub-holon’, or part, was a ‘local optimum’ if it was not the bottleneck, and any enhancement of it’s performance would not be useful to the system, since we could not use that extra performance at the constraint. The sum of the local optimums is not equal to a global optimum.

So let’s apply that thinking to the way in which we secure, utilise and distribute resources.

In any given complex system, no part can consider itself to be independent of the whole. Every action is dependent, in respect of its resolution in consequences, on a myriad of other actions taken by other independent entities. ‘Ah, you have trapped yourself in a contradiction’, I hear you say.

Not at all. While each entity in any complex system may act independently, the outcome of such actions cannot possibly take place independently. They must be dependent on factors outside of the single entity and so must by definition be interdependent with the environment with which the entity interacts. It means that the act of distributing resources towards one entity must have consequences in the entity’s external environment – the resources must come from somewhere.

The next question to be asked is whether the resource pool is finite or infinite, which should be glaringly obvious to anyone except perhaps a fool or a child. Since the planet is a single living system, it is difficult to see how it can be anything but finite. And if finite, then any distribution towards a single entity in the system must have the effect that something is taken from the environment in which that entity exists. It is simply unavoidable.

It was not always so. Prior to the expansion of mankind and their colonisation of the globe, it was quite possible for civilisations to exist independently of each other, within closed economic systems, since their resource bases were not threatened by each other’s actions. But with the expansion of the ‘Global Village”, nobody can exist in isolation from the effects of another’s actions.

When we speak of people who make demands on their environment in such a manner that their own needs are portrayed as more pressing than the needs of others, we say their behaviour is driven by the desire for ‘immediate need gratification’, the inability to defer one’s needs.

We say that those who behave without due consideration for others are ‘egocentric’, ‘self-absorbed’, ‘selfish’ or any of a number of terms we use to describe those who seem to lack the awareness of the needs of others.

We refer to these two dynamics as signs of immaturity because children display these behaviours naturally until they mature either due to pressure from society or because of their own insight.

There are two dimensions here, the time aspect and the ‘size’ aspect. Children live in the ‘Now’, and of course there is a sense in which they are right. There is only now. Everything else exists either in our memories or in our imaginations. But the actions of today will have consequences in all our tomorrows, and when we act on our needs, we borrow from or invest in the future depending on the nature of our action. When we utilise resources at our disposal for our own short term needs and in so doing, borrow from our future, we are in ‘immediate need’ mode. When we invest resources today in a future benefit, we do so as an investment in our own security, and have deferred our needs. The one strategy is a trade-off for the other, for we cannot have both utilising the same resource. If the wisdom in this seems obvious to you, then consider this: why is it that humanity as a collective cannot see this, or refuses to see it, or sees it but cannot act in a wise manner because there are other constraints that impact on this scenario?

What we have in the Syndrome above is typical of an entire global society, who seem bent on focusing on short-term objectives and local optimums at the expense of the long haul and the ‘whole’. We might say that human society needs to grow up, that it’s behaviour is that of a spoilt child..

The system gives the parts incentive to behave in their own interests. Whether we speak of personal, political, social, economic or ecological interests, we seem to be hardwired with this idea of our ‘own’ as opposed to the ‘other’. The most obvious form of this is ownership, a strange idea when one considers that we cannot pretend to ‘own’ something that has been here much longer than we have, for example the land. In fact, the notion of owning anything that has a life longer than ourselves illustrates it’s absurdity. The law puts it another way: ‘the uninterrupted use of the property’ constitutes ownership, which implies that the owner can do with the resource, be it land, mineral rights, a business, or an animal, exactly as he or she wishes. And herein lies our first problem that highlights how we have built short-term agendas into our thinking. What is there to prevent an owner from destroying the resource for any future owner or making it redundant so that it becomes useless? A typical example is the use of land. Irresponsible or injudicious use of agricultural resources can render them useless for long periods of time, affecting entire communities. Another more obvious example is the plundering of fossil fuels. I say ‘plundering’ because it is an irreplaceable, diminishing resource for which there is increasing demand. Do the math. And we’re not even adding in the impact that the burning of fossil fuels has had on the environment, which is significant even if we ignore global warming.

Oil barons and those connected to the Oil industry have made Trillions of Dollars over the years, and we would say that they were ‘prosperous’. Such prosperity could only be regarded as a global optimum if there were no downside, no side effect, no future consequence of note. But we now know there is, and we now recognise that their prosperity was gained at the expense of not only others on the planet at the time, but into the future, who knows how far? So their prosperity was a local optimum, because it did not bring value to the holon that is often referred to as Gaia, the Earth as a living system. In fact, it damaged it. Why does the system allow this? Where did they get the right to do so?

They received this right by virtue of the profit motive. The pursuit of happiness is enshrined in human thinking, and even if such happiness is gained at the expense of someone or something else, it somehow does not tarnish the ideal in the minds of those who pursue it. In some people’s minds, if someone else suffers that makes it all the more worthwhile, a sad indictment of the competitive drive. It brings out the worst in us, not the best. Benjamin Disraeli said that next to knowing when to seize an opportunity, the most important thing in life is to know when to forego an advantage. I wonder whether the opportunity to be dominant is of any value to the whole, and whether this is a drive we even want in the system? And if we examine the kind of people that need to dominate, we see that people who have high security needs are driven by their insecurity; the need for control. Why would we want these weak people to prosper, much less control the resources of the planet? Yet our system not only says it’s okay, it rewards it. Why is it okay to take more out of the system than you put in?

People justify this with hackneyed phrases like “I deserve it”, ‘I’m self-made’, ‘I have free will’ – concepts that illustrate the collapse of intelligence, shared beliefs that drive the mindset, propagated and reinforced by those who have benefited from it. The drive for prosperity has produced an entire generation that has become so blinkered by their own need that they can no longer see how completely ludicrous these beliefs are. The reason why they cannot see them is because they have become so ego-dependent and they are so busy congratulating themselves that they have never questioned the underlying assumptions of their beliefs. Where do we get this notion that we can ‘deserve’ what we have distributed towards ourselves? Let’s think about the conditions that would have to be in place for that to be true.

We would first have to believe that Existence is Fair, that we live in a Just Universe, because ‘to deserve’ can be rephrased “get our just desserts”. That this is an article of faith should be obvious to the reader, but if it isn’t, consider this: How do you know that existence is fair? You would have to appeal to an article of faith, since there is abundant evidence to the contrary. Consider the tenuousness of life, from the moment your existence started as the sperm made it’s way towards the ovum. Then consider the dangers of the nine months spent in the womb, and the high risk associated with being a child, especially if you were born in a developing country, or one experiencing a drought. If you made it past the age of 10, having escaped floods, famine, wild animals, epidemic diseases, economic hardship, wars, genocides, crime, parents and natural disasters, you would have done well. Now think about the various factors impacting on all of those, and then tell me that life is fair. Just taking into consideration the opportunities available and the parameters within each person must choose and act surely render this argument null and void. If you do insist that life is fair, you would have to introduce an unknown factor. Call it God, if you will, or some other ‘spiritual’ entity or rule, the great equaliser, conveniently absent from proceedings except by virtue of – you guessed it – an article of faith.

You would also have to believe, clinging desperately to this notion of the justness of existence, that we are all equal, since any inequality would be an injustice. And while we say that ‘all men are born equal’, ignoring for a moment the sexist nature of the statement, is there any evidence that this has any referent in reality? If we are, the nature and parameters of such equality are completely invisible, since the overwhelming majority of evidence is against it. If we use the paradigm of the ‘types of intelligence’ as advocated by Gardner, i.e. Logical-Mathematical, Musical, Naturalist, Existential, Interpersonal, Bodily-Kinesthetic, Linguistic, Intra-personal and Spatial intelligence, it becomes evident that not only do we all have differing potentials in all of these areas, but combination of these abilities makes for an impossibly complex and infinite number of values, always supposing we had a method of attaching objective measurements to these concepts, which we don’t. To claim that we are all equal is patently absurd. “But we were born equal, and our differing environments altered our potential”, the egghead shouts from the back of the class. Firstly, how can we possibly know that, and secondly, so what? The fact is that by the time we enter the world of work and fend for ourselves, the abilities are at a certain level, and may be enhanced, to be sure, or, if neglected, will diminish; but the fact of their difference is inescapable.

It will do no good to appeal to the example of those who battle their way through and are successful, ‘against the odds’, as it were. The very fact that they are the exception rather than the rule should tell us something. One cannot use the exception to prove that all can do so. The exception proves that only exceptional people can rise above the norm, and we could not safely exclude the nature of their circumstances and the contributions made by events outside their locus of control.

Free will is the final building block in the edifice of this crumbling construct. The believer now hangs by the fingers to their ability to choose, the capacity to make decisions that are free of prejudice. It’s really an appeal to another religious idea – the conscience, because if we exclude conscience from the human condition, then we must exclude morality, and if we exclude morality, we supposedly invite anarchy. But free will is a preposterous exaggeration of the human capacity. It suggests that, in any given situation, we ‘know’ inherently what is the ‘right thing to do’.

I remember, in my conscription year in the army, meeting a Greek guy named Taki who not only taught me how to play chess, but also how to consider carefully my options in life. I never did beat him, a draw being my best ever effort, but I learnt much about choices and consequences. I understood that knowing what the ‘right thing to do’ was in any given situation depended very much on my experience, my knowledge, and my capacity to predict the possible consequences of my actions. As I have matured and expanded my knowledge base, and my experience of life has given me a multitude of precedents to aid me in my choices, my capacity to make useful choices, I believe, has increased. But it is not, by any stretch of the imagination, a moral ability to know right from wrong, since it is tainted by self-interest, and in addition, I cannot possibly see the global consequences of my local decisions, the linkages being invisible to me. We decide locally, we affect globally, and only view the local decision with moral insight. Even our morality is enclosed within the walls of our tiny universes.

The articles of faith of the capitalist religion – the world is fair, all people are equal, and have free will – have their roots in a moral imperative created by faith in the belief systems that preceded the maturing of legal and political thinking. Their foundation was the notion that good and evil were known to all and the capacity for discerning their difference was an inherent ability.

Since we have seen that the world is unfair; that we are unequal; and that free will is a myth, we must recognise that a system that reinforces these illusions will result in other inequities such as wildly disparate distributions of opportunity, huge differences in people’s capacity to act in their own interests, and vast chasms between their abilities to make choices that benefit themselves and their environment.

Look around you, and see the consequences.

“We are fellow members of the human race, not rivals in it. We are given intelligence and freedom to counteract and control the effects of the hazard that underlies all existence; not to justify injustice by them” – John Fowles, The Aristos, 1964



1 Comment »

  1. Yes. all quite right and accurate. Beautifully said. Well written, thoughtful, insightful in some aspects. A good point of view that MANY share.
    BUT, WHAT IF…. We could find a TRUE, CLEAN, RENEWABLE energy source?
    NAW…….. as you said, Utopia does not exist, It’s not about solutions to the problem, it’s about changing a state of mind for the ENTIRE human race. So that the mangroves do NOT get cut away to export shrimp….
    And WHAT are the chances of THAT Happening!?
    I’ll think I’ll just have pizza for lunch so I can feel better.

    Comment by Linda Davis — August 13, 2008 @ 9:17 am

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