economics | Digifesto

post-election updates

Like a lot of people, I was completely surprised by the results of the 2016 election.

Rationally, one has to take these surprises as an opportunity to update ones point of view. As it’s been almost a month, there’s been lots of opportunity to process what’s going on.

For my own sake, more than for any reader, I’d like to note my updates here.

The first point has been best articulated by Jon Stewart:

Stewart rejected the idea that better news coverage would have changed the outcome of the election. “The idea that if [the media] had done a better job this country would have made another choice is fake,” he said. He cited Brexit as an example of an unfortunate outcome that occurred despite its lead-up being appropriately covered by outlets like the BBC, which offered a much more balanced view than CNN, for example. “Trump didn’t happen because CNN sucks—CNN just sucks,” he said.

Satire and comedy also couldn’t have stood in the way of Trump winning, Stewart said. If this election has taught us anything, he said, its that “controlling the culture does not equate to holding the power.”

I once cared a lot about “money in politics” at the level of campaign donations. After a little critical thinking, this leads naturally to a concern about the role of the media more generally in elections. Centralized media in particular will never put themselves behind a serious bid for campaign finance reform because those media institutions cash out every election. This is what it means for a problem to be “systemic”: it is caused by a tightly reinforcing feedback loop that makes it into a kind of social structural knot.

But with the 2016 presidential election, we’ve learned that Because of the Internet, media are so fragmented that even controlled media are not in control. People will read what they want to read, one way or another. Whatever narrative suits a person best, they will be able to find it on the Internet.

A perhaps unhelpful way to say this is that the Internet has set the Bourdieusian habitus free from media control.

But if the media doesn’t determine habitus, what does?

While there is a lot of consternation about the failure of polling (which is interesting), and while that could have negatively impacted Democratic campaign strategy (didn’t it?), the more insightful sounding commentary has recognized that the demographic fundamentals were in favor of Trump all along because of what he stood for economically and socially. Michael Moore predicted the election result; logically, because he was right, we should update towards his perspective; he makes essentially this point about Midwestern voters, angry men, depressed progressives, and the appeal of oddball voting all working against Hilary. But none of these conditions have as much to do with media as they do to the preexisting population conditions.

There’s a tremendous bias among those who “study the Internet” to assign tremendous political importance to the things we have expertise on: the media, algorithms, etc. My biggest update this election was that I now think that these are eclipsed in political relevance compared to macro-economic issues like globalization. At best changes to, say, the design of social media platforms are going to change things for a few people at the margins. But larger structural forces are both more effective and more consequential in politics. I bet that a prediction of the 2016 election based primarily on the demographic distribution of winners and losers according to each candidate’s energy policy, for example, would have been more valuable than all the rest of the polling and punditry combined. I suppose I was leaning this way throughout 2016, but the election sealed the deal for me.

This is a relief for me because it has revealed to me just how much of my internalization and anxieties about politics have been irrelevant. There is something very freeing in discovering that many things that you once thought were the most important issues in the world really just aren’t. If all those anxieties were proven to just be in my head, then it’s easier to let them go. Now I can start wondering about what really matters.

Leave a comment

July 25, 2015

Land and gold (Arendt, Horkheimer)

I am thirty, still in graduate school, and not thrilled about the prospects of home ownership since all any of the professionals around me talk about is the sky-rocketing price of real estate around the critical American urban centers.

It is with a leisure afforded by graduate school that I am able to take the long view on this predicament. It is very cheap to spend ones idle time reading Arendt, who has this to say about the relationship between wealth and property:

The profound connection between private and public, manifest on its most elementary level in the question of private property, is likely to be misunderstood today because of the modern equation of property and wealth on one side and propertylessness and poverty on the other. This misunderstanding is all the more annoying as both, property as well as wealth, are historically of greater relevance to the public realm than any other private matter or concern and have played, at least formally, more or less the same role as the chief condition for admission to the public realm and full-fledged citizenship. It is therefore easy to forget that wealth and property, far from being the same, are of an entirely different nature. The present emergence everywhere of actually or potentially very wealthy societies which at the same time are essentially propertyless, because the wealth of any single individual consists of his share in the annual income of society as a whole, clearly shows how little these two things are connected.

For Arendt, beginning with her analysis of ancient Greek society, property (landholding) is the condition of ones participation in democracy. It is a place of residence and source of ones material fulfilment, which is a prerequisite to ones free (because it is unnecessitated) participation in public life. This is contrasted with wealth, which is a feature of private life and is unpolitical. In ancient society, slaves could own wealth, but not property.

If we look at the history of Western civilization as a progression away from this rather extreme moment, we see the rise of social classes whose power is based on in landholding but in wealth. Industrialism and the economy based on private ownership of capital is a critical transition in history. That capital is not bound to a particular location but rather is mobile across international boundaries is one of the things that characterizes global capitalism and brings it in tension with a geographically bounded democratic state. It is interesting that a Jeffersonian democracy, designed with the assumption of landholding citizens, should predate industrial capitalism and be consitutionally unprepared for the result, but nevertheless be one of the models for other democratic governance structures throughout the world.

If private ownership of capital, not land, defines political power under capitalism, then wealth, not property, becomes the measure of ones status and security. For a time, when wealth was as a matter of international standard exchangeable for gold, private ownership of gold could replace private ownership of land as the guarantee of ones material security and thereby grounds for ones independent existence. This independent, free rationality has since Aristotle been the purpose (telos) of man.

In the United States, Franklin Roosevelt’s 1933 Executive Order 6102 forbade the private ownership of gold. The purpose of this was to free the Federal Reserve of the gold market’s constraint on increasing the money supply during the Great Depression.

A perhaps unexpected complaint against this political move comes from Horkheimer (Eclipse of Reason, 1947), who sees this as a further affront to individualism by capitalism.

The age of vast industrial power, by eliminating the perspectives of a stable past and future that grew out of ostensibly permanent property relations, is the process of liquidating the individual. The deterioration of his situation is perhaps best measured in terms of his utter insecurity as regards to his personal savings. As long as currencies were rigidly tied to gold, and gold could flow freely over frontiers, its value could shift only within narrow limits. Under present-day conditions the dangers of inflation, of a substantial reduction or complete loss of the purchasing power of his savings, lurks around the next corner. Private possession of gold was the symbol of bourgeois rule. Gold made the burgher somehow the successor of the aristocrat. With it he could establish security for himself and be reasonable sure that even after his death his dependents would not be completely sucked up by the economic system. His more or less independent position, based on his right to exchange goods and money for gold, and therefore on the relatively stable property values, expressed itself in the interest he took in the cultivation of his own personality–not, as today, in order to achieve a better career or for any professional reason, but for the sake of his own individual existence. The effort was meaningful because the material basis of the individual was not wholly unstable. Although the masses could not aspire to the position of the burgher, the presence of a relatively numerous class of individuals who were governed by interest in humanistic values formed the background for a kind of theoretical thought as well as for the type of manifestions in the arts that by virtue of their inherent truth express the needs of society as a whole.

Horkheimer’s historical arc, like many Marxists, appears to ignore its parallels in antiquity. Monetary policy in the Roman Empire, which used something like a gold standard, was not always straightforward. Inflation was sometimes a severe problem when generals would print money to pay the soldiers hat supported their political coups. So it’s not clear that the modern economy is more unstable than gold or land based economies. However, the criticism that economic security is largely a matter of ones continued participation in a larger system, and that there is little in the way of financial security besides this, holds. He continues:

The state’s restriction on the right to possess gold is the symbol of a complete change. Even the members of the middle class must resign themselves to insecurity. The individual consoles himself with the thought that his government, corporation, association, union, or insurance company will take care of him when he becomes ill or reaches the retiring age. The various laws prohibiting private possession of gold symbolize the verdict against the independent economic individual. Under liberalism, the beggar was always an eyesore to the rentier. In the age of big business both beggar and rentier are vanishing. There are no safety zones on society’s thoroughfares. Everyone must keep moving. The entrepreneur has become a functionary, the scholar a professional expert. The philosopher’s maxim, Bene qui latuit, bene vixit, is incompatible with the modern business cycles. Everyone is under the whip of a superior agency. Those who occupy the commanding positions have little more autonomy than their subordinates; they are bound by the power they wield.

In an academic context, it is easy to make a connection between Horkheimer’s concerns about gold ownership and tenure. Academic tenure is or was the refuge of the individual who could in theory develop themselves as individuals in obscurity. The price of this autonomy, which according the philosophical tradition represents the highest possible achievement of man, is that one teaches. So, the developed individual passes on the values developed through contemplation and reflection to the young. The privatization of the university and the emphasis on teaching marketable skills that allow graduates to participate more fully in the economic system is arguably an extension of Horkheimer’s cultural apocalypse.

The counter to this is the claim that the economy as a whole achieves a kind of homeostasis that provides greater security than one whose value is bound to something stable and exogenous like gold and land. Ones savings are secure as long as the system doesn’t fail. Meanwhile, the price of access to cultural materials through which one might expand ones individuality (i.e. videos of academic lectures, the arts, or music) decrease as a consequence of the pervasiveness of the economy. At this point one feels one has reached the limits of Horkheimer’s critique, which perhaps only sees one side of the story despite its sublime passion. We see echoes of it in contemporary feminist critique, which emphasizes how the demands of necessity are disproportionately burdened by women and how this affects their role in the economy. That women have only relatively recently, in historical terms, been released from the private household into the public world (c.f. Arendt again) situates them more precariously within the economic system.

What remains unclear (to me) is how one should conceive of society and values when there is an available continuum of work, opportunity, leisure, individuality, art, and labor under conditions of contemporary technological control. Specifically, the notion of inequality becomes more complicated when one considers that society has never been equal in the sense that is often aspired to in contemporary American society. This is largely because the notion of equality we use today draws from two distinct sources. The first is the equality of self-sufficient landholding men as they encounter each other freely in the polis. Or, equivalently, as self-sufficient goldholding men in something like the Habermasian bourgeois public sphere. The second is equality within society, which is economically organized and therefore requires specialization and managerial stratification. We can try to assure equality to members of society insofar as they are members of society, but not as to their function within society.

Leave a comment

July 22, 2015

Arendt on social science

Despite my first (perhaps kneejerk) reaction to Arendt’s The Human Condition, as I read further I am finding it one of the most profoundly insightful books I’ve ever read.

It is difficult to summarize: not because it is written badly, but because it is written well. I feel every paragraph has real substance to it.

Here’s an example: Arendt’s take on the modern social sciences:

To gauge the extent of society’s victory in the modern age, its early substitution of behavior for action and its eventual substitution of bureaucracy, the rule of nobody, for personal rulership, it may be well to recall that its initial science of economics, which substitutes patterns of behavior only in this rather limited field of human activity, was finally followed by the all-comprehensive pretension of the social sciences which, as “behavioral sciences,” aim to reduce man as a whole, in all his activities, to the level of a conditioned and behaving animal. If economics is the science of society in its early stages, when it could impose its rules of behavior only on sections of the population and on parts of their activities, the rise of the “behavioral sciences” indicates clearly the final stage of this development, when mass society has devoured all strata of the nation and “social behavior” has become the standard for all regions of life.

To understand this paragraph, one has to know what Arendt means by society. She introduces the idea of society in contrast to the Ancient Greek polis, which is the sphere of life in Antiquity where the head of a household could meet with other heads of households to discuss public matters. Importantly for Arendt, all concerns relating to the basic maintenance and furthering of life–food, shelter, reproduction, etc.–were part of the private domain, not the polis. Participation in public affairs was for those who were otherwise self-sufficient. In their freedom, they would compete to outdo each other in acts and words that would resonate beyond their lifetime, deeds, through which they could aspire to immortality.

Society, in contrast, is what happens when the mass of people begin to organize themselves as if they were part of one household. The conditions of maintaining life are public. In modern society, people are defined by their job; even being the ruler is just another job. Deviation from ones role in society in an attempt to make a lasting change–deeds–are considered disruptive, and so are rejected by the norms of society.

From here, we get Arendt’s critique of the social sciences, which is essentially this: that is only possible to have a social science that finds regularities of people’s behavior when their behavior has been regularized by society. So the social sciences are not discovering a truth about people en masse that was not known before. The social sciences aren’t discovering things about people. They are rather reflecting the society as it is. The more that the masses are effectively ‘socialized’, the more pervasive a generalizing social science can be, because only under those conditions are there regularities there to be captured as knowledge and taught.

Leave a comment

March 31, 2015

Innovation, automation, and inequality

What is the economic relationship between innovation, automation, and inequality?

This is a recurring topic in the discussion of technology and the economy. It comes up when people are worried about a new innovation (such as data science) that threatens their livelihood. It also comes up in discussions of inequality, such as in Piketty’s Capital in the Twenty-First Century.

For technological pessimists, innovation implies automation, and automation suggests the transfer of surplus from many service providers to a technological monopolist providing a substitute service at greater scale (scale being one of the primary benefits of automation).

For Piketty, it’s the spread of innovation in the sense of the education of skilled labor that is primary force that counteracts capitalism’s tendency towards inequality and (he suggests) the implied instability. For the importance Piketty places on this process, he treats it hardly at all in his book.

Whether or not you buy Piketty’s analysis, the preceding discussion indicates how innovation can cut both for and against inequality. When there is innovation in capital goods, this increases inequality. When there is innovation in a kind of skilled technique that can be broadly taught, that decreases inequality by increasing the relative value of labor to capital (which is generally much more concentrated than labor).

I’m a software engineer in the Bay Area and realize that it’s easy to overestimate the importance of software in the economy at large. This is apparently an easy mistake for other people to make as well. Matthew Rognlie, the economist who has been declared Piketty’s latest and greatest challenger, thinks that software is an important new form of capital and draws certain conclusions based on this.

I agree that software is an important form of capital–exactly how important I cannot yet say. One reason why software is an especially interesting kind of capital is that it exists ambiguously as both a capital good and as a skilled technique. While naively one can consider software as an artifact in isolation from its social environment, in the dynamic information economy a piece of software is only as good as the sociotechnical system in which it is embedded. Hence, its value depends both on its affordances as a capital good and its role as an extension of labor technique. It is perhaps easiest to see the latter aspect of software by considering it a form of extended cognition on the part of the software developer. The human capital required to understand, reproduce, and maintain the software is attained by, for example, studying its source code and documentation.

All software is a form of innovation. All software automates something. There has been a lot written about the potential effects of software on inequality through its function in decision-making (for example: Solon Barocas, Andrew D. Selbst, “Big Data’s Disparate Impact” (link).) Much less has been said about the effects of software on inequality through its effects on industrial organization and the labor market. After having my antennas up for this for many reasons, I’ve come to a conclusion about why: it’s because the intersection between those who are concerned about inequality in society and those that can identify well enough with software engineers and other skilled laborers is quite small. As a result there is not a ready audience for this kind of analysis.

However unreceptive society may be to it, I think it’s still worth making the point that we already have a very common and robust compromise in the technology industry that recognizes software’s dual role as a capital good and labor technique. This compromise is open source software. Open source software can exist both as an unalienated extension of its developer’s cognition and as a capital good playing a role in a production process. Human capital tied to the software is liquid between the software’s users. Surplus due to open software innovations goes first to the software users, then second to the ecosystem of developers who sell services around it. Contrast this with the proprietary case, where surplus goes mainly to a singular entity that owns and sells the software rights as a monopolist. The former case is vastly better if one considers societal equality a positive outcome.

This has straightforward policy implications. As an alternative to Piketty’s proposed tax on capital, any policies that encourage open source software are ones that combat societal inequality. This includes procurement policies, which need not increase government spending. On the contrary, if governments procure primarily open software, that should lead to savings over time as their investment leads to a more competitive market for services. Equivalently, R&D funding to open science institutions results in more income equality than equivalent funding provided to private companies.

Leave a comment

February 22, 2015

Hirschman, Nigerian railroads, and poor open source user interfaces

Hirschman says he got the idea for Exit, Voice, and Loyalty when studying the failure of the Nigerian railroad system to improve quality despite the availability of trucking as a substitute for long-range shipping. Conventional wisdom among economists at the time was that the quality of a good would suffer when it was provisioned by a monopoly. But why would a business that faced healthy competition not undergo the management changes needed to improve quality?

Hirschman’s answer is that because the trucking option was so readily available as an alternative, there wasn’t a need for consumers to develop their capacity for voice. The railroads weren’t hearing the complaints about their service, they were just seeing a decline in use as their customers exited. Meanwhile, because it was a monopoly, loss in revenue wasn’t “of utmost gravity” to the railway managers either.

The upshot of this is that it’s only when customers are locked in that voice plays a critical role in the recuperation mechanism.

This is interesting for me because I’m interested in the role of lock-in in software development. In particular, one argument made in favor of open source software is that because it is not technology held by a single firm, users of the software are not locked-in. Their switching costs are reduced, making the market more liquid and, in theory favorable.

You can contrast this with proprietary enterprise software, where vendor lock-in is a principle part of the business model as this establishes the “installed base” and customer support armies are necessary for managing disgruntled customer voice. Or, in the case of social media such as Facebook, network effects create a kind of perceived consumer lock-in and consumer voice gets articulated by everybody from Twitter activists to journalists to high-profile academics.

As much as it pains me to admit it, this is one good explanation for why the user interfaces of a lot of open source software projects are so bad specifically if you combine this mechanism with the idea that user-centered design is important for user interfaces. Open source projects generally make it easy to complain about the software. If they know what they are doing at all, they make it clear how to engage the developers as a user. There is a kind of rumor out there that open source developers are unfriendly towards users and this is perhaps true when users are used to the kind of customer support that’s available on a product for which there is customer lock-in. It’s precisely this difference between exit culture and voice culture, driven by the fundamental economics of the industry, that creates this perception. Enterprise open source business models (I’m thinking about models like the Pentaho ‘beekeeper’) theoretically provide a corrective to this by being an intermediary between consumer voice and developer exit.

A testable hypothesis is whether and to what extent a software project’s responsiveness to tickets scales with the number of downstream dependent projects. In software development, technical architecture is a reasonable proxy for industrial organization. A widely used project has network effects that increasing switching costs for its downstream users. How do exit and voice work in this context?

Leave a comment

February 21, 2015

The node.js fork — something new to think about

For Classics we are reading Albert Hirschman’s Exit, Voice, and Loyalty. Oddly, though normally I hear about ‘voice’ as an action from within an organization, the first few chapters of the book (including the introduction of the Voice concept itselt), are preoccupied with elaborations on the neoclassical market mechanism. Not what I expected.

I’m looking for interesting research use cases for BigBang, which is about analyzing the sociotechnical dynamics of collaboration. I’m building it to better understand open source software development communities, primarily. This is because I want to create a harmonious sociotechnical superintelligence to take over the world.

For a while I’ve been interested in Hadoop’s interesting case of being one software project with two companies working together to build it. This is reminiscent (for me) of when we started GeoExt at OpenGeo and Camp2Camp. The economics of shared capital are fascinating and there are interesting questions about how human resources get organized in that sort of situation. In my experience, there becomes a tension between the needs of firms to differentiate their products and make good on their contracts and the needs of the developer community whose collective value is ultimately tied to the robustness of their technology.

Unfortunately, building out BigBang to integrate with various email, version control, and issue tracking backends is a lot of work and there’s only one of me right now to both build the infrastructure, do the research, and train new collaborators (who are starting to do some awesome work, so this is paying off.) While integrating with Apache’s infrastructure would have been a smart first move, instead I chose to focus on Mailman archives and git repositories. Google Groups and whatever Apache is using for their email lists do not publish their archives in .mbox format, which is pain for me. But luckily Google Takeout does export data from folks’ on-line inbox in .mbox format. This is great for BigBang because it means we can investigate email data from any project for which we know an insider willing to share their records.

Does a research ethics issue arise when you start working with email that is openly archived in a difficult format, then exported from somebody’s private email? Technically you get header information that wasn’t open before–perhaps it was ‘private’. But arguably this header information isn’t personal information. I think I’m still in the clear. Plus, IRB will be irrelevent when the robots take over.

All of this is a long way of getting around to talking about a new thing I’m wondering about, the Node.js fork. It’s interesting to think about open source software forks in light of Hirschman’s concepts of Exit and Voice since so much of the activity of open source development is open, virtual communication. While you might at first think a software fork is definitely a kind of Exit, it sounds like IO.js was perhaps a friendly fork of just somebody who wanted to hack around. In theory, code can be shared between forks–in fact this was the principle that GitHub’s forking system was founded on. So there are open questions (to me, who isn’t involved in the Node.js community at all and is just now beginning to wonder about it) along the lines of to what extent a fork is a real event in the history of the project, vs. to what extent it’s mythological, vs. to what extent it’s a reification of something that was already implicit in the project’s sociotechnical structure. There are probably other great questions here as well.

A friend on the inside tells me all the action on this happened (is happening?) on the GitHub issue tracker, which is definitely data we want to get BigBang connected with. Blissfully, there appear to be well supported Python libraries for working with the GitHub API. I expect the first big hurdle we hit here will be rate limiting.

Though we haven’t been able to make integration work yet, I’m still hoping there’s some way we can work with MetricsGrimoire. They’ve been a super inviting community so far. But our software stacks and architecture are just different enough, and the layers we’ve built so far thin enough, that it’s hard to see how to do the merge. A major difference is that while MetricsGrimoire tools are built to provide application interfaces around a MySQL data backend, since BigBang is foremost about scientific analysis our whole data pipeline is built to get things into Pandas dataframes. Both projects are in Python. This too is a weird microcosm of the larger sociotechnical ecosystem of software production, of which the “open” side is only one (important) part.

Leave a comment

January 25, 2015

The solution to Secular Stagnation is more gigantic stone monuments

Because I am very opinionated, I know what we should do about secular stagnation.

Secular stagnation is what economists are calling the problem of an economy that is growing incorrigibly slowly due to insufficient demand–low demand caused in part by high inequality. A consequence of this is that for the economy to maintain high levels of employment, real interest rates need to be negative. That is bad for people who have a lot of money and nothing to do with it. What, they must ask themselves in their sleepless nights, can we do with all this extra money, if not save it and earn interest?

History provides an answer for them. The great empires of the past that have had more money than they knew what to do with and lots of otherwise unemployed people built gigantic stone monuments. The Pyramids of Egypt. Angor Wat in Cambodia. Easter Island. Machu Pichu.

The great wonders of the world were all, in retrospect, enormous wastes of time and money. They also created full employment and will be considered amazing forever.

Chances like this do not come often in history.

Leave a comment

July 6, 2014

economic theory and intellectual property

I’ve started reading Piketty’s Capital. His introduction begins with an overview of the history of economic theory, starting with Ricardo and Marx.

Both these early theorists predicted the concentration of wealth into the hands of the owners of factors of production that are not labor. For Ricardo, land owners extract rents and dominate the economy. For Marx, capitalists–owners of private capital–accumulate capital and dominate the economy.

Since those of us with an eye on the tech sector are aware of a concentration of wealth in the hands of the owners of intellectual property, it’s a good question what kind of economic theory ought to apply to those cases.

One one sense, intellectual property is a kind of capital. It is a factor of production that is made through human labor.

On the other hand, we talk about ideas being ‘discovered’ like land is discovered, and we imagine that intellectual property can in principle be ‘shared’ like a ‘commons’. If we see intellectual property as a position in a space of ideas, it is not hard to think of it like land.

Like land, a piece of intellectual property is unique and gains in value due to further improvements–applications or innovations–built upon it. In a world where intellectual property ownership never expires and isn’t shared, you can imagine that whoever hold some critical early work in some field could extract rents for perpetuity. Owning a patent would be like owning a land estate.

Like capital, intellectual property is produced by workers and often owned by those investing in the workers with pre-existing capital. The produced capital is then owned by the initiating capitalist, and accumulates.

Open source software is an important exception to this pattern. This kind of intellectual property is unalienated from those that produce it.

Leave a comment

June 19, 2014

turns out network backbone markets in the US are competitive after all

I’ve been depressed lately about the oligopolistic control of telecommunications for a while now. There’s the Web We’ve Lost; there’s Snowden leaks; there’s the end of net neutrality. I’ll admit a lot of my moodiness about this has been just that–moodiness. But it was moodiness tied to a particular narrative.

In this narrative, power is transmitted via flows of information. Media is, if not determinative of public opinion, determinative of how that opinion is acted up. Surveillance is also an information flow. Broadly, mid-20th century telecommunications enabled mass culture due to the uniformity of media. The Internet’s protocols allowed it to support a different kind of culture–a more participatory one. But monetization and consolidation of the infrastructure has resulted in a society that’s fragmented but more tightly controlled.

There is still hope of counteracting that trend at the software/application layer, which is part of the reason why I’m doing research on open source software production. One of my colleagues, Nick Doty, studies the governance of Internet Standards, which is another piece of the puzzle.

But if the networking infrastructure itself is centrally controlled, then all bets are off. Democracy, in the sense of decentralized power with checks and balances, would be undermined.

Yesterday I learned something new from Ashwin Mathew, another colleague who studies Internet governance at the level of network administration. The man is deep in the process of finishing up his dissertation, but he looked up from his laptop for long enough to tell me that the network backbone market is in fact highly competitive at the moment. Apparently, there was a lot of dark fiberoptic cable (“dark fiber“–meaning, no light’s going through it) laid during the first dot-com boom, which has been laying fallow and getting bought up by many different companies. Since there are many routes from A to B and excess capacity, this market is highly competitive.

Phew! So why the perception of oligopolistic control of networks? Because the consumer-facing telecom end-points ARE an oligopoly. Here there’s the last-mile problem. When wire has to be laid to every house, the economies of scale are such that it’s hard to have competitive markets. Enter Comcast etc.

I can rest easier now, because I think that this means there’s various engineering solutions to this (like AirJaldi networks? though I think those still aren’t last mile…; mesh networks?) as well as political solutions (like a local government running its last mile network as a public utility).

Leave a comment

April 20, 2013

Ascendency and overhead in networked ecosystems

Ulanowicz (2000) proposes in information-theoretic terms several metrics for ecosystem health, where one models an ecosystem as a for example a trophic network. Principal among them ascendancy , which is a measure of the extent to which energy flows in the system are predictably structured weighted by the total energy of the system. He believes that systems tend towards greater ascendancy in expectation, and that this is predictive of ecological ‘succession’ (and to some extent ecological fitness). On the other hand, overhead, which is unpredictability (perhaps, inefficiency) in energy flows (“free energy”?), are important for the system’s resiliency towards external shocks.

At least in the papers I’ve read so far, Ulanowicz is not mathematically specific about the mechanism that leads to greater ascendancy, though he sketches some explanations. Autocatalytic cycles within the network reinforce their own positive perturbations and mutations, drawing in resources from external sources, crowding out and competing with them. These cycles become agents in themselves, exerting what Ulanwicz suggests is Aristotelian final or formal causal power on the lower level components. In this way, freely floating energy is drawn into structures of increasing magnificence and complexity.

I’m reminded on Bataille’s The Accursed Share, in which he attempts to account for societal differences and the arc of human history through the use of its excess energy. “The sexual act is in time what the tiger is in space,” he says, insightfully. The tiger, as an apex predator, is flame that clings brilliantly to the less glamorous ecosystem that supports it. That is why we adore them. And yet, their existence is fragile, as it depends on both the efficiency and stability of the rest of its network. When its environment is disturbed, it is the first to suffer.

Ulanowicz cites himself suggesting that a similar framework could be used to analyze computer networks. I have not read his account yet, though I anticipate several difficulties. He suggests that data flows in a computer network are analogous to energy flows within an ecosystem. That has intuitive appeal, but obscures the fact that some data is more valuable than others. A better analogy might be money as a substitute for energy. Or maybe there is a way to reduce both to a common currency, at least for modeling purposes.

Econophysics has been gaining steam, albeit controversially. Without knowing anything about it but based just on statistical hunches, I suspect that this comes down to using more complex models on the super duper complex phenomenon of the economy, and demonstrating their success there. In other words, I’m just guessing that the success of econophysics modeling is due to the greater degrees of freedom in the physics models compared to non-dynamic, structural equilibrium models. However, since ecology models the evolutionary dynamics of multiple competing agents (and systems of those agents), its possible that those models could capture quite a bit of what’s really going on and even be a source of strategic insight.

Indeed, economics already has a sense of stable versus unstable equilibria that resonate with the idea of stability of ecological succession. These ideas translate into game theoretic analysis as well. As we do more work with Strategic Bayesian Networks or other constructs to model equilibrium strategies in a networked, multi-agent system, I wonder if we can reproduce Ulanowicz’s results and use his ideas about ascendancy (which, I’ve got to say, are extraordinary and profound) to provide insight into the information economy.

I think that will require translating the ecosystem modeling into Judea Pearl’s framework for causal reasoning. Having been indoctrinated in Pearl’s framework in much of my training, I believe that it is general enough to subsume Ulanowicz’s results. But I have some doubt. In some of his later writings Ulanowicz refers explicitly to a “Hegelian dialectic” between order and disorder as a consequence of some of his theories, and between that and his insistence on his departure from mechanistic thinking over the course of his long career, I am worried that he may have transcended what it’s possible to do even with the modeling power of Bayesian networks. The question is: what then? It may be that once one’s work sublimates beyond our ability to model explicitly and intervene strategically, it becomes irrelevant. (I get the sense that in academia, Ulanwicz’s scientific philosophizing is a privilege reserved for someone tenured who late in their career is free to make his peace with the world in their own way) But reading his papers is so exhilarating to me. I’ve had no prior exposure to ecology before this, so his papers are packed with fresh ideas. So while I don’t know how to justify it to any of my mentors or colleagues, I think I just have to keep diving into it when I can, on the side.

3 Comments

Category: economics