The System of the World

Neal Stephenson’s Baroque Cycle is magnificent and once of the key themes he wrestles with is how ideas have shaped the modern world. The one you and I live in. In the last of the three books that make up the cycle there’s a discussion where one of the characters tries to bring Leibniz and Newton together, to try to reconcile them because she fears that if they aren’t then the future will be riven by that failure and the two systems of how the world works will compete against each other at untold cost to human life and well being.

It’s an interesting, and quite compelling idea. It’s also, IMHO, a fiction.

I’m not going to talk about the financial markets in this post Ned – but what I say will hopefully reveal something of what I believe is both the problem and the outcome to the question you posed in your comments on the LTRO.

There is no system of the world. At best there are axioms that interact from which complex behavior emerges. That complex behavior, because its emergent is fundamentally unpredictable and, ultimately, ungovernable. There is no system that can provide riskless opportunities, safe environments or transform people into agents who only act well. In my view, anyone who says different is deluded by the bright lights of human invention which continually promises that this time, with this idea, things will be better.

I say bright lights because so often those ideas are genius, they really do offer an improvement in the common lot. Roads, electricity, universal health care, justice for all, equality of opportunity. Yet every one of these emerges from a context, tackles a small part of human existence and creates untold and unforeseen suffering in their wake even if, on a net basis, they are a boon to mankind as a whole.

I do not believe there is a system for the world. I don’t think regulation can save us. Why not? Because if we could save ourselves then we wouldn’t need regulation in the first place. Law reveals something fundamental about human nature and that’s the fact that we’re built out of conflict and competition. As long as there are differences between us, as long as you are not me and I am not you, then the potential is there for us to disagree over what is the good, what is the best and what is forbidden. And that’s just between two of us. Add to that languages, cultures, locations and billions of real people and no amount of law making can make these things go away.

The grand achievement of humanity – and don’t get me wrong it is grand – is to have managed to find ways of working together to achieve what no individual could even have dreamed was possible. We are amazing as much as we’re flawed. It’s in this space of conflict in who we are, greedy, altruistsic, curious, delusional, brave, cowardly, young, old, man and woman, that greatness emerges but it’s also from there that our most profound failures come. When we insist that those who aren’t like us, who don’t believe like we do, who don’t want what we do (or have what we want). When we seek to regulate away our difference, force conformity (my conformity, not yours!)…well that’s when we remind ourselves that whatever greatness lies in us it’s twin, self-destruction, always takes the throne.

Are bankers worse than others? No, complex systems create odd results. I’m not absolving moral agents from any blame. Selfish and greedy people are just that and part of those vices is that they only flourish in environments where other human beings have been downgraded to “not quite as real or as valuable as us”. However, I am suggesting that incentives always direct the greater part of behavior over time – people who ignore incentives that others benefit from rarely survive over the long term. Now, one might easily counter that incentives need to be reformed. I agree. I just haven’t seen anything that I believe would work. Not because clever people haven’t tried. Good grief they’ve tried. But complex systems are just that and even well thought through ideas are at the mercy of the unknown unknowns.

I think it’s about leverage. Archimedes’ idea not financial leverage. I think that changing behavior (if one can get comfortable with the notion) is not about criminalizing people who want to make money (how is that any worse than people who want to teach children? By the way, the answer: “it just is” doesn’t qualify as even worth responding to)It’s about helping this mass of people we call society find better ways of encouraging themselves to create incentives, needs and values that benefit themselves in a different way.

I don’t believe in the greater good for the greater number. I’m a minority and we don’t ever fare well under utility. Nor am I suggesting that it’s easy to even suggest what values and benefits we should promote. Just because you think nurses should be paid more why should I? A hundred years ago promoting values would have included excluding women from voting, sending gay people to jail and segregating non-whites from any positions of wealth, influence or opportunity. We need to be careful what we think we’re aiming for.

Now I’m not just throwing my hands up in defeat. Every person can seek to change the world around them. We can all make a difference – it’s just we should recognize that the difference most of us will make will be in our own lives and it may come with a cost. Personally I think we should be more than satisfied with making a positive difference in each others lives, it’s a road to nowhere to decide that because you can’t change some guy you’ve never met you shouldn’t do anything at all.

Finally…I’d rather live now that one hundred, five hundred or two thousand years ago. I think humans have it, on the whole, pretty good right about now when compared to the vast swathe of history. This isn’t me overlooking all the calamity and tragedy in the world nor am I saying that the past was unremitting horror.

I’ll finish with this - Creating the world we want is not free – nor is it, in the end, possible. But I’m going to spend my life trying and I hope that that will be enough for those who know me.