Rather than using indicators to observe the performance of the economic system, should we not use units to design the economic system in the manner that we want? The pilot, as a system manager, requires a dashboard full of indicators, but the engineer, as the system designer, doesn’t use any. Rather, she knows how every design decision affects the lift, drag, weight, thrust, and thus the acceleration vector, and can determine what is required to change the system further so that it will operate in the target performance envelope.
With the well-being economy being discussed, this is the perfect opportunity to climb out from under the Invisible Hand and actual try to have the economy work for us, rather than the other way around.
Kudos to the efforts on a vision of a well being economy. Unfortunately, the average person out there does not have the literacy to understand what is good for them and the economy, and they are the masses who comprise the economy. Yet, it is the actions and reactions of the masses that is taken as the indicators for what is good for the economy. Do you see the logic in that? High literacy rate does not guarantee that the average person improve their understanding, and US is a classic example. As long as the financial goal, ie. with GDP, is the ultimate goal for an economy, the economy continues the path of achieving financial goal at the expense of all others. What is the alternative? That may be too technical for this platform (all types of economic system inclusive).
Allow me to elaborate with something more platable for this platform - healthcare. Most people, ie. average people, would think that they need healthcare only when they are not well? That is incorrect. Healthcare is an everyday affair! Would you agree that everybody has to watch out not to take poison, instead of food? Healthcare is the knowledge to differentiate food from poison. If poison and food seems would be too drastic an illustration, then how about toxic and non-toxic food? If we go a little further, we have unhealthy and healthy food. The difference is the former causes illnesses, ranging from diabetes to heart diseases, genetic issues aside, while the latter allows you to die of natural death.
The average person always go for what tastes good, and convenient, and lifestyle, but not what is good as in nutrition, which requires knowledge. Would you agree? Given that all businesses must make money to survive in this economy, people in food business must make sure their food tastes good and convenient to have profits in their business. Thus, with a competitive market, taste better and more convenient become synonymous with achieving the financial goal. The result is convenient food packaging that tastes good, and most of them are processed food, because you can add fillers, including "toxic" ingredients, unless ban by law, to lower the costs. How many of these average person bother to check them out, because it is inconvenient, and if they do check would they know what these "toxic" ingredients are? The fall back is that the average person in US think that they can sue the food business…. Does nutrition matters at all? No. Consequently, the average person gets poor health, which leads to the next phase, and that is the medical care that most people are familiar with as healthcare. It is a vicious circle, not just in this aspect, but also the medical healthcare with health insurance and so on, which most people are familiar with. That would go into much more technical stuff.
BTW, here is my comments on Douglas’s comments. A system manager deals with time sensitive data, while a system designer is not. The indicators allow the system manager to find out what is happening in real time, which a system designer does not need to do.
Absolutely! In fact, if the system designer uses the indicators in their design, they run a very serious risk of disabling the usefulness of the indicator.
For example, the canary in a coal mine is only effective if it is breathing the same air as the miners. But if I design the mine ventilation so the canary gets the air first, the canary won’t die from poison gasses, but the miners will. And while that is a dumb example, we do that all the time by relying on regulations as our performance indicators, rather than a complete understanding of the system as a whole. Putting UV lights on the effluent leaving a sewage treatment plant to eliminate e.Coli, for instance. The e.Coli is boring, but far more common than the Giardia, salmonella, diphtheria, etc. that make up the plethora of water-borne diseases. So we watch for e.Coli, and we assume there is one Giardia for every million e.Coli. But with the UV lights, the e.coli is killed off. Now what is the ratio? If we see 200 e.Coli after treatment, how many Giardia are there now? We have seriously diminished the effectiveness of the indicator.
Designers must use predictive models to understand how a future condition will cause the system to react. Indicators, by their nature, can not be predictive. So, if we are going to design a complex system, we have to use the units of measure of the system and the rate equations between them. While it turns out to be very non-linear, the rate equations between quality of life, energy use, resource use, and available ecological functions are all able to be determined from the community being assessed, and the impact on quality of life from various changes (eg, peak fossil carbon, changing demographics and population, collapse of over-consumed ecological systems, the outcome of regenerative efforts, etc.) can be assessed, and the most appropriate choices can be made in advance.
Rather than lurching from crisis to crisis by trying to pilot a system that hasn’t been designed for the conditions, wouldn’t it be simpler to design a more robust and resilient system? For the Wright Brothers, it was by moving the ailerons to the back of the plane. For civil society, it is by identifying and removing the obstructions within the community that prevent people from meeting their needs. Most of them are simple to address far enough in advance (para-ramps on sidewalks to allow increased mobility, installed during regular maintenance, for example), but that means planning that is looking at 40 to 120 years ahead, not just to the next election. Every element of infrastructure that I design today will get it’s first major maintenance in a low-energy-intensity future - yet we still build for the present demand, not the future capacity to service it. Just when energy is becoming scarce, and the economy shrinks as a result, our infrastructure will require maintenance that is too expensive to undertake, and we will have to abandon both the installed hardware, and the benefits that come from it.
By designing for that (or any other) future condition, we can include sufficient resilience to avoid the worst of the surprises coming down the pipe. And that can be done by specifically designing for well-being in the long-term.
Kudos to your design ideas. You are not alone. But all designs for change remain just that because it is the mindset ingrained since day one of civilisation. Separated by geographical spread, different civilisation established different norms and beliefs, because the world of knowledge was limited then, and the world is so big and unknown. Over thousands of years, our mindset has been ingrained by what we understood at that time, and build our knowledge from there. Then, we moved from a barter economy to the different types of economies with money as the medium of exchange that we now know.
Since these new economies are designed with money as the focal point, it is inevitable that the free capitalist economies, which have their primary focus on money as the focal point, will fare better than the planned economies. Unfortunately, politicians and economists took advantage of the triumph to convince people that it is their ideologies, theories, and ideas, behind the success. There you have it!
For this reason, no matter how big and grand the vision of a well being economy is, despite the castrophic events, like world wars and financial crisis, and that empires come and go, the root cause remains entrenched, since day one of every civilisation to end every civilisation eventually.
We are now much more knowledgeable than we started. We can see the entire earth and touch down on Mars. But our civilisations, and the politics within each civilisation, remain as fragmented as when we started. There is so much misinformation and disinformation that everyone gets information overloaded. The lastest fiasco on Jan 6 2021 is a classic example of the fragmentation.
Nonetheless, US has been the world’s largest economy that many other emerging economies, including China, hope to emulate. China is now the 2nd largest now. With the progress made, inevitably, China will think that their ideologies and ideas (socialist or communist with free capitalist market) are better than US, despite no change in the root cause. Thus, the free capitalist economies continue to churn on, despite the vision of a well being economy.
The challenge with this vision is that the "well being", so far, as an indicator is very subjective. For most people, who cannot envision how the world economy works, it must be simple enough for them to understand, if not comply, knowing that it is for their own good. My previous comments with healthcare is an example of the problems faced here.
COMMENTS
BY Douglas Nuttall
ON January 17, 2021 01:04 PM
Rather than using indicators to observe the performance of the economic system, should we not use units to design the economic system in the manner that we want? The pilot, as a system manager, requires a dashboard full of indicators, but the engineer, as the system designer, doesn’t use any. Rather, she knows how every design decision affects the lift, drag, weight, thrust, and thus the acceleration vector, and can determine what is required to change the system further so that it will operate in the target performance envelope.
With the well-being economy being discussed, this is the perfect opportunity to climb out from under the Invisible Hand and actual try to have the economy work for us, rather than the other way around.
BY Daniel RH Ho
ON April 7, 2021 09:48 AM
Kudos to the efforts on a vision of a well being economy. Unfortunately, the average person out there does not have the literacy to understand what is good for them and the economy, and they are the masses who comprise the economy. Yet, it is the actions and reactions of the masses that is taken as the indicators for what is good for the economy. Do you see the logic in that? High literacy rate does not guarantee that the average person improve their understanding, and US is a classic example. As long as the financial goal, ie. with GDP, is the ultimate goal for an economy, the economy continues the path of achieving financial goal at the expense of all others. What is the alternative? That may be too technical for this platform (all types of economic system inclusive).
Allow me to elaborate with something more platable for this platform - healthcare. Most people, ie. average people, would think that they need healthcare only when they are not well? That is incorrect. Healthcare is an everyday affair! Would you agree that everybody has to watch out not to take poison, instead of food? Healthcare is the knowledge to differentiate food from poison. If poison and food seems would be too drastic an illustration, then how about toxic and non-toxic food? If we go a little further, we have unhealthy and healthy food. The difference is the former causes illnesses, ranging from diabetes to heart diseases, genetic issues aside, while the latter allows you to die of natural death.
The average person always go for what tastes good, and convenient, and lifestyle, but not what is good as in nutrition, which requires knowledge. Would you agree? Given that all businesses must make money to survive in this economy, people in food business must make sure their food tastes good and convenient to have profits in their business. Thus, with a competitive market, taste better and more convenient become synonymous with achieving the financial goal. The result is convenient food packaging that tastes good, and most of them are processed food, because you can add fillers, including "toxic" ingredients, unless ban by law, to lower the costs. How many of these average person bother to check them out, because it is inconvenient, and if they do check would they know what these "toxic" ingredients are? The fall back is that the average person in US think that they can sue the food business…. Does nutrition matters at all? No. Consequently, the average person gets poor health, which leads to the next phase, and that is the medical care that most people are familiar with as healthcare. It is a vicious circle, not just in this aspect, but also the medical healthcare with health insurance and so on, which most people are familiar with. That would go into much more technical stuff.
BTW, here is my comments on Douglas’s comments. A system manager deals with time sensitive data, while a system designer is not. The indicators allow the system manager to find out what is happening in real time, which a system designer does not need to do.
BY Douglas Nuttall
ON April 8, 2021 10:35 AM
Absolutely! In fact, if the system designer uses the indicators in their design, they run a very serious risk of disabling the usefulness of the indicator.
For example, the canary in a coal mine is only effective if it is breathing the same air as the miners. But if I design the mine ventilation so the canary gets the air first, the canary won’t die from poison gasses, but the miners will. And while that is a dumb example, we do that all the time by relying on regulations as our performance indicators, rather than a complete understanding of the system as a whole. Putting UV lights on the effluent leaving a sewage treatment plant to eliminate e.Coli, for instance. The e.Coli is boring, but far more common than the Giardia, salmonella, diphtheria, etc. that make up the plethora of water-borne diseases. So we watch for e.Coli, and we assume there is one Giardia for every million e.Coli. But with the UV lights, the e.coli is killed off. Now what is the ratio? If we see 200 e.Coli after treatment, how many Giardia are there now? We have seriously diminished the effectiveness of the indicator.
Designers must use predictive models to understand how a future condition will cause the system to react. Indicators, by their nature, can not be predictive. So, if we are going to design a complex system, we have to use the units of measure of the system and the rate equations between them. While it turns out to be very non-linear, the rate equations between quality of life, energy use, resource use, and available ecological functions are all able to be determined from the community being assessed, and the impact on quality of life from various changes (eg, peak fossil carbon, changing demographics and population, collapse of over-consumed ecological systems, the outcome of regenerative efforts, etc.) can be assessed, and the most appropriate choices can be made in advance.
Rather than lurching from crisis to crisis by trying to pilot a system that hasn’t been designed for the conditions, wouldn’t it be simpler to design a more robust and resilient system? For the Wright Brothers, it was by moving the ailerons to the back of the plane. For civil society, it is by identifying and removing the obstructions within the community that prevent people from meeting their needs. Most of them are simple to address far enough in advance (para-ramps on sidewalks to allow increased mobility, installed during regular maintenance, for example), but that means planning that is looking at 40 to 120 years ahead, not just to the next election. Every element of infrastructure that I design today will get it’s first major maintenance in a low-energy-intensity future - yet we still build for the present demand, not the future capacity to service it. Just when energy is becoming scarce, and the economy shrinks as a result, our infrastructure will require maintenance that is too expensive to undertake, and we will have to abandon both the installed hardware, and the benefits that come from it.
By designing for that (or any other) future condition, we can include sufficient resilience to avoid the worst of the surprises coming down the pipe. And that can be done by specifically designing for well-being in the long-term.
BY Daniel RH Ho
ON April 12, 2021 09:56 AM
Kudos to your design ideas. You are not alone. But all designs for change remain just that because it is the mindset ingrained since day one of civilisation. Separated by geographical spread, different civilisation established different norms and beliefs, because the world of knowledge was limited then, and the world is so big and unknown. Over thousands of years, our mindset has been ingrained by what we understood at that time, and build our knowledge from there. Then, we moved from a barter economy to the different types of economies with money as the medium of exchange that we now know.
Since these new economies are designed with money as the focal point, it is inevitable that the free capitalist economies, which have their primary focus on money as the focal point, will fare better than the planned economies. Unfortunately, politicians and economists took advantage of the triumph to convince people that it is their ideologies, theories, and ideas, behind the success. There you have it!
For this reason, no matter how big and grand the vision of a well being economy is, despite the castrophic events, like world wars and financial crisis, and that empires come and go, the root cause remains entrenched, since day one of every civilisation to end every civilisation eventually.
We are now much more knowledgeable than we started. We can see the entire earth and touch down on Mars. But our civilisations, and the politics within each civilisation, remain as fragmented as when we started. There is so much misinformation and disinformation that everyone gets information overloaded. The lastest fiasco on Jan 6 2021 is a classic example of the fragmentation.
Nonetheless, US has been the world’s largest economy that many other emerging economies, including China, hope to emulate. China is now the 2nd largest now. With the progress made, inevitably, China will think that their ideologies and ideas (socialist or communist with free capitalist market) are better than US, despite no change in the root cause. Thus, the free capitalist economies continue to churn on, despite the vision of a well being economy.
The challenge with this vision is that the "well being", so far, as an indicator is very subjective. For most people, who cannot envision how the world economy works, it must be simple enough for them to understand, if not comply, knowing that it is for their own good. My previous comments with healthcare is an example of the problems faced here.