Monday, December 21, 2009

The Diagonal Economy 5: The Power of Networks

It’s tempting at first to view the Diagonal Economy as fancy gloss on retreat into a more circumscribed social network.  This view, however, fails to capture the power and complexity of two critical but little understood theories of organization that promise to elegance and efficiency to the Diagonal Economy.  The first is really a set of theories and observations often described as “small worlds” theory.  The second is the much more ethereal notion of emergence—almost wholly a mystery to modern science, yet critical (we think) to such functions as consciousness and developmental microbiology.  Combined, these two concepts transform the Diagonal Economy from an inefficient and isolationist form of economic organization to a system that can provide superior coordination of production and information processing than is possible within our modern economy.  In this post, I’ll explore the importance of efficient coordination to the viability of the Diagonal Economy.  In the next two posts, I’ll address small worlds theory and emergence as applied to the Diagonal Economy. 

Simply put, this is the backbone of the Diagonal Economy—the theoretical structure that animates this theory, and that makes it a truly viable and implementable course for our future, as opposed to mere fantasy.  Personally, I find the intersection of the notion of the Diagonal Economy with these animating theories very exciting, which is why I’m devoting a separate post to both small worlds theory and emergence (yes, they are already written, and will appear the next two Mondays, respectively).  While I’ve addressed small worlds theory before, next week’s post will correct significant mistakes in my previous writing and provide a clear methodology and set of guiding principles for optimizing flat small worlds networks to be far more efficient than the currently prevailing small worlds gold standard.  Similarly, the application of emergence to the Diagonal Economy should be intriguing, as it is a field of science that controls phenomena as critical as consciousness and human development, but that we fundamentally don’t understand.

Today, however, my aim is to discuss the importance of efficiency and effectiveness of coordination of production and information processing.  Both of the next two posts, on small worlds optimization and emergence, provide tools to make the Diagonal Economy better at economic coordination and at information processing.  But why do we care about this?  Quite simply, this is what separates the Diagonal Economy from the simplistic alternative of merely going “back to the land” or other isolationist or self-sufficiency theories as alternatives to our current system.  These simpler alternatives fail precisely because they cannot compete with the economic power of hierarchal structures—even accounting for energy descent and other factors that undercut hierarchies.  From food production to manufacturing and knowledge industries, even oppressive and poorly-functioning hierarchies will out-perform isolated self-sufficiency. 

If these isolated nodes of self-sufficiency connect, communicate, and interact, then they will enjoy an improve position relative to hierarchal structures.  Especially in light of the massive challenges facing our civilization in the coming decades, and in light of our desire not merely to survive but to prosper and to build a better world than today, a vibrant alternative will require a superior mode of organization.  It will require a superior mode of coordinating complex economic production, communicating and processing information, of building a creative and elegantly simple culture.  It will need to do this without succumbing to the temptations of hierarchy, especially during times of crisis, by leveraging an organizing structure more powerful and efficient than hierarchy—even more powerful and efficient than current optimizations of hierarchies plus networks, hierarchies plus commons as seen in our current society (note, here, that while civilization has never been a pure hierarchy, our current system of hierarchy plus network is plainly not sufficiently free from the problems of hierarchy to escape the Problem of Growth).

Additionally, from the perspective of the diagonal, the Diagonal Economy will begin as a complementary structure that is coextensive but out of phase with our current system.  However, it will be precisely because it leverages a more efficient information processing structure that it will be able to eventually supplant the substrate hierarchies as the dominant system (which will obviate the causes of the Problem of Growth).

Readers may also find my litigation checklist of interest.


TH in SoC said...

This sounds promising, Jeff. By the way, congratulations on the new baby. I do have just one question regarding the Diagonal Economy: does its efficient coordination of production and information processing require continued access to advanced digital electronic communication and silicon-based microelectronics? If not, what forms of information transfer would be viable replacements as widespread access to energy-intensive electronics decreases?

Jeff Vail said...

Hi TH,

Thanks, and interesting question. I think that the coordination and communication within the Diagonal Economy does depend on advanced digital electronic communication, though I wouldn't say "requires." I think this is an important distinction: I'm not going to pretend that the internet, for example, won't help facilitate this coordination--it will, and amazingly so. However, I think there are alternatives that can provide the same function (if less efficiently): periodic trade fairs (which performed this function in medieval Champagne, for example), itinerant/nomadic groups/individuals/religious orders, pirates (actually, there's surprisingly a lot of literature on this point), etc.

Two more points in response:

1. I'm not particularly concerned about the collapse of the internet. First, while it may be quite energy and hierarchy intensive at the moment, I don't think the specific functionalities required to best facilitate network in the Diagonal Economy need be. An internet functioning on nothing but 2400 baud modems and phone lines could suffice, as could a much simpler network cobbled together by HAM radio, or even a reasonably reliable system of peer-to-peer physical mail service.

2. I think that, from a structural transition standpoint, the most important question is the comparative dependence on the internet (or other complex technologies) between the mainstream, hierarchal economy and the Diagonal Economy. Here, I think the mainstream economy is far more dependent--the dependence of the industrial food production, processing, and distribution system alone is staggering. Even if the coordination and efficiency of both structures decline if modern communication systems break down, I think this process will favor transition to the Diagonal Economy--especially if the conscious awareness of its structure and a faint outline of its actual manifestation are already in place at that point (frankly, I think the faint outline is already there, even in the US--it's the conscious awareness of the optimal structure and concept that needs work).

TH in SoC said...

Sounds exciting. I can already think of a few informal networks with which I am familiar. I am also just now starting to dive into the subjects of small worlds and emergence. Lots to chew on.

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