Listening to the economy: The cybernetics of Risk
This paper is about the distinctions that constitute our ‘antennae’ as we try to listen to a world in economic crisis and make meaningful decisions based on what we hear. I propose that cybernetic mechanisms can re-wire our antennae, and in the process help us to see what may be happening in a new light.
I start with the conception of ‘viable systems’ (drawing on Beer) and human attachment and loss (drawing on Bowlby) arguing that they can provide a framework for the questioning of economic assumptions concerning property, commodities, money, exchange and markets which underpin the conventional economic viewpoint from which nations are experiencing such difficulty in making meaningful distinctions and constructive policy decisions.
Fundamental to the argument is that the conception of humans as viable biological systems relates directly to the sociological work of Beck concerning ‘risk’: ‘risk’ is experienced as anxiety, which in itself can be seen as a systemic reaction of the viable system with regard to its interactions with the environment. Coupled with risk is the reality of ‘loss’ for those caught up in the economic crisis, and in this regard, Bowlby’s control systems view of ‘attachment’ can help to characterise the interpersonal dimensions which have a bearing on mechanisms of individual well-being and anxiety management.
This short paper proceeds by addressing each of the key economic concepts re-articulating them in cybernetic terms. In conclusion, by arguing that our ability to listen to the world in which we live depends on the quality of our antennae, a cybernetic intervention focused on the construction of new sorts of antennae may be a useful thing to do!
Introduction
Our distinctions help us to hear what we hear and do what we do. The extent to which one’s hearing can be related to one’s doing is an indication of the extent to which one may be listening: but our distinctions determine how our antennae work.
At a time of economic crisis, the most obvious thing to do is to question our distinctions. Unfortunately, many of those distinctions are seen to be simply too difficult, or worse, simply too ‘obvious’ to be critiqued: debts must be repaid. In search of powerful questions however, cybernetics can provide different ways of examining lived experience, whilst acknowledging that this experience contains ‘property’, ‘money’, ‘markets’ and increasingly ‘services’.
The cybernetics of viable systems (most notably that of Beer (1971)) presents a way in which to conceive of experience within the framework of regulating mechanisms within an environment. Leonard’s presentation of the ‘Personal VSM’ (Leonard, www) provides one way of thinking about this: people must manage the things they have to do through instinctive or habitual actions, organising adequate resources so that things get done, monitoring what is actually happening, thinking ahead about what might need to change, and finally considering the various balances between dreaming, coordinating and reacting as part of an expression of individual identity.
Within those individual processes of managing personal viability, there is another aspect of experience, mutually contingent on the first as we engage with things and people around us: we fall in love, have children, buy houses, learn to play the piano, get jobs and look after our parents. Equally, we may lose our jobs, our houses and our loved ones. These may be considered mechanisms of ‘attachment’ to other people as articulated by Bowlby (1958). It is my contention in this paper that they may also be considered as mechanisms of attachment to ‘things’ too.
Emotional life can be considered to exist between the mechanisms of individual viability and mechanisms of attachment: the thrills, joys and losses of ‘being’ somehow relate to attachments to loved ones and things, but equally those emotional responses must logically be determined by some state of (in)ability to manage complexities and maintain viability at particular moments on the part of the individual experiencing them. Drawing on Beck’s (1992) analysis of the experience of modernity, we might say however that beyond those rare instances where new attachments are made (like falling in love) or losses experienced, the practical balance of individual viability is characterised by differing levels of risk, and its associated emotional landscape is characterised by anxiety.
Property and Attachment
Our attachment to material artefacts, other people, intellectual ideas, religious belief, language, culture and personal habits are all considered factors which underpin economic behaviour. From Keynes’s ‘propensity to consume’ (2007) to Sen’s (2007) recent work on identity, it seems that the core of our values lies in attaching value to things external to us. In the case of people who we love, one set of economic behaviours arises: the provision of safety and opportunity, for example. In the case of material things, another set of economic behaviours arise: the exchange of goods and services, the management of money. Equally, the ownership of ideas and opinions by individuals can be seen to directly relate to human behaviour that seeks to defend ‘identity’, some of which will be directly economic.
In identifying that such behaviour may relate to personal identity, Sen’s insight into the relationship between identity and violence (Sen, 2007) invites a cybernetic description of the operation of the person as a ‘viable system’ in Beer’s sense. Moreover, if such an insight can show a relationship between viable systems and ‘commodities’ as well as between viable systems and ‘opinions’, then a radical view of ‘property’ can be articulated which provides an alternative to the traditional concepts of commodities, services, value and exchange which have received little attention since Marx, or indeed since the work of Smith (1776) and Locke (1689).
At the root of such a description is the idea that property and identity might be conceived of as being biological. But if the identity of a viable biological system depends on the relationship between that system and ‘commodities’ in the environment, personal opinions and other people, how might the operation of that system be characterised?
Bowlby’s description of mechanisms of attachment might provide a way of characterising this. Bowlby argues that the relationship between mother and child is a feedback mechanism: “”the child’s tie to his mother is a product of the activity of a number of behavioural systems that have proximity to mother as a predictable outcome” By citing ‘proximity’, Bowlby argued against the Freudian view of the mother-child relationship which was based on the mother feeding the child. Instead, citing Lorenz’s (1978) work on ‘Imprinting’, Bowlby argued that there had to be a control system operating whereby systems effectively ‘locked-on’ to one another. However, Bowlby stops short of articulating the detail of the mechanisms whereby this might take place. Using Beer’s VSM, it may be possible to suggest a possibility which also addresses the key issue of ‘proximity’.
Beer’s VSM and Mechanisms of Attachment
The Viable System Model articulates a number of regulating mechanisms which maintain different aspects of viability of the system within an environment. From the environment to the viable system there are perturbations to which the mechanisms of the system must react, altering the organisation of the system components. The perturbations from the environment ultimately take the form of sense-perceptions: sounds, smells, caresses, images. Each of these will have a continual impact on the viability of the system. Furthermore, the individual organisational impact of a sense-perception will have some bearing on future sense-perception, with dispositions to certain sensual stimuli continually evolving. Thus the processes of sense-perception may be viewed as being chained from one perception to another in the stream of experience.
Bowlby saw attachment as a mechanism of homeostasis with the environment. By looking at the sensual relationship between the individual and the environment, a mechanism can be described whereby internal homeostasis produces external behaviour in the form of attachment which contributes to the maintenance of internal homeostasis. Given this continual chain of sense-perceptions which are selected on the basis of previous sense perceptions, and the requirement of the individual biological system to maintain its viability, it is conceivable that a particular ‘sensual configuration’, maybe in the form of the mother (or, in Lorenz’s case, in the form of ‘giant eggs’ or wire-frame ‘mothers’) may become the object of focus for the biological system as it has become adaptationally disposed to continue to maintain a proximal relationship to the source of those sense perceptions. At the root of this relationship of attachment therefore, the need for the viable system to become attached in order to maintain its identity can be suggested.
Property
Whilst Bowlby’s focus is on the control systems which relate mother and child, the mechanism described here is focused on the sense perceptions of a biological system, and the need to maintain a sensual (and therefore proximal) relationship with the source of those sense productions. In line with Lorenz’s discoveries, a relationship between biological and inanimate objects in the environment might also be suggested within this mechanism.
When individuals become attached to objects there are various words used to describe the relationship and the experience. Amongst these ‘property’ and ‘commodity’ might be listed. In this way, a conception of property may be considered as a biological mechanism and this is in sharp distinction to the classical conception of property originating in the thought of Locke, who conceived of property being connected to the labour of the person who owns a commodity. This labour-mixing theory survived largely intact through the work of Smith and then Marx.
However, a biological view of property sees the sensual relations to an object as fundamental to the process of maintaining the viability and identity of the individual in whom there is an attachment relationship to the object. In other words, the identity of individuals may be seen as being constituted by the sensual relationships they have with those things they are attached to. This however presents a problem, for it then becomes difficult to explain why it is anyone would want to trade an object to which they are attached for another object.
Exchange and Risk
We can consider what happens in the biological viability of a person when property is exchanged. Exchange occurs when property seen from a biological context is transferred from one person to another, and at the end of this process, the individuals concerned have new attachments to new objects and have given up their attachments to their old objects. This might be viewed from the perspective of the loss of an attachment (and consequently the potential loss of identity and viability within the person), and the formation of a new attachment and the reconstitution of identity.
What might be the driver for doing this? Using the VSM, one of the principle regulating mechanisms is what Beer terms System 4. System 4’s job is to consider how the world might change, what new threats might evolve and how the system ought to adapt to survive in a changed world. In addition to this, the other regulating mechanisms of the VSM are continually having to cope with environmental perturbations which can change the operating environment and quickly produce situations which are unmanageable. Amongst these mechanisms, the anxiety of future survival manifests itself in the continual concern of the viable system to develop organisational capacities that will help it survive and maintain its identity in changed circumstances.
Viewed in this way, exchange may be seen as a survival mechanism whereby the system finds ways of relinquishing old attachments providing the consequent loss of sensual perturbations can be compensated for with some new attachment. Such an emphasis on sensual compensation and maintenance of viability provides an alternative to classical economic theories about rational choice.
Money can be seen to be a special case of this sort of mechanism. Money as a generalised means of acquiring new objects of attachment may have its own ‘sensual’ properties and a general capacity to compensate for a wide range of loss of attachments in lieu of an increased capacity to replace them at some point in the future. Beyond this, conventional economic behaviour of consumption and saving can be seen as ways of compensating for the loss of attachments and the accrual of increasing means for sustained viability through the capacity to acquire new objects of attachment as necessary.
But as with simple exchange, behind this behaviour lies the fundamental anxiety that is associated with the risks of modern life, that somehow the objects with which we constitute our identity are impermanent, and their loss deemed a threat to our identity. Viewed in this way, economic behaviour is more ‘systemic’ than rational: it is an attempt to mitigate catastrophic loss in a way which preserves individual identity.
The Biology of Risk
Beck argues that the fundamental economic and social distinctions of modernity concern risk and anxiety rather than the distribution of wealth. In his view, it is the distribution of risks which shows up the marked inequalities between social groups. Those who have access to economic and social capital and who have high levels of education have the means to manage their anxieties in ways in which those who don’t cannot. For “the means to manage anxieties and risks” we might say “the means to manage their identities”. But modern society is providing new ways of managing risks which go beyond attachments to commodities.
In recent years, western economies have focused on services rather than industrial production. Like commodities, services provide “sensual perturbations” to individuals who may well respond with the same attachment behaviours as with commodities and other forms of property. Mobile phone services are a good example. But services are different from commodities in that they are not available for exchange because the capital content of a service is not owned by the service consumer. Services may be instead seen to offer ‘palliative’ risk-management rather than anything with which a more fundamental attachment might be formed.
The biological perspective of property that has been presented here allows us to consider the implications of this and to relate them to current economic trends. Despite the best efforts of many western governments, the gap between the richest in society and the poorest has been steadily increasing. With economic behaviour understood as biological mechanism of attachment based around sensual relations with commodities, an explanation for this may be suggested. This is that traditional means of maintaining viability through the acquisition of commodities with which individuals have attachments is increasingly replaced by the ‘palliative’ effects of services which, whilst they perform a similar function to commodities, do not afford the means of control and exchange to consumers. On the other hand, the providers of services accumulate capital on a global basis and use this capital:
a. As the basis of their service provision
b. As a means of removing commodity alternatives which consequently forces consumers to consume their services.
Conclusion: Listening to the economy with better antennae
In this paper, I have elaborated some new distinctions of property based on the attachment relations individuals have to commodities. This has focused on the sensual relations between the viable operations of individuals and the objects and people in the world that surrounds them. In reality, relations between things and people are not only sensual but also linguistic. The elaboration of a linguistic dimension to the mechanisms described would allow for greater refinement in the mechanisms of markets and the political dimensions of the economy.
In the present economic crisis, ‘loss’ is the principle experience for the unfortunate and ‘anxiety’ a mechanism which exists within everyone who sees loss occurring. I have argued that loss is a challenge to personal identity and viability. Economic behaviour can be understood as a means by which individuals acquire capacity to adapt whilst maintaining their identity. But what is happening to western economies can be seen to be directly related to the management of risks and anxiety, where the nature of the means for managing risks available to consumers is changing. Where there were once new commodities to which individuals could form attachments, and consequently exchange them, now there are services which directly address anxieties but without releasing any of their capital for exchange.
An economic crisis is very hostile and alien territory. But survival in hostile and alien territory requires deep listening to understand the nature of that territory. But the listening requires the right sort of antennae. It may be the case that the classical economic view cannot pick up the signals that need to be picked up if we are to steer ourselves from this situation.
References
(in the comments!)
References:
Beck, U (1992) The Risk Society
Beer, S (1971) Brain of the Firm, Wiley
Bowlby (1958) Attachment and Loss
Keynes, J.M. (2007) The General Theory of Employment, Interest and Money
Leonard, A (www) Personal VSM available online at http://www.allennaleonard.com/PersVSM.html
Locke, J (1689) Two treatises on Government
Lorenz, K (1978) Behind the Mirror: a search for a natural history of Human Knowledge
Sen, A (2007) Identity and Violence
Smith, A (1776) The Wealth of Nations
What I most like about this is that I could never, in a thousand years, think like this. I am not being in any way dismissive. I am revelling in the difference that can exist when we listen.
One question: how can you talk of the actual (monitoring what is actually happening)? Surely there is a matter of choice in here? I mean, to talk of the actual is to evade the question of how e know, and whose knowing we believe.
Do you think the concept of co-dependency might be more helpful that the feedback between mother and child (Bowlby)?
You set an interesting challenge, to reconsider how we own things.
Thanks Ranulph!
I think there’s a two-level answer to the question of the actual. On the one hand I’m trying to think about perception and viability, and I don’t think that’s a matter of ‘choice’ (in a subjective sense), but rather it’s about ‘selections’: ultimately, we’re in the realm of differences, and differences that make differences. I suspect we don’t choose the actual at this level, we just process differences.
But there is a level above that where there is (for me) clearly choice. That is the moral choice as to how we view the world, and how we choose the world we want to live in. This is the political level.
The two levels are related in some way – although I haven’t yet worked it through to a stage where I can think how… Although Wittgenstein’s comment that “ethics and aesthetics are one” is resonating strongly with me at the moment!
Mark:
First, I wish to say I am looking forward to your Modeling Listening workshop. Your mention of NetLogo inspired me and I’ve since been looking into the program. Actually, I am looking into the possibilities of how NetLogo may suit “The ACRE Model” (among a few other models I have been contemplating with more direct, practical applications), which was my submission to the Cybernetics of Cybernetics competition. I will be discussing ACRE at the conference on Tuesday and I hope if you are available you may “be present” (to borrow a phrase from Larry); I’d be very interested to hear your thoughts on the relation between ACRE and your own challenge of “rational choice” within the VSM idea you’ve put forth here, along with the capabilities of NetLogo you are experiencing.
Regarding your proposal, I regret not digesting and commenting on this earlier being it is perhaps the paper most explicitly speaking to my background in Economics (I should have been listening better!). I have a ways to go in comprehending some of the cybernetics references you cite and the VSM in particular, but hopefully I’ll be at a greater level of understanding by the time the conference rolls around.
In addition, I think we share a similar disconnect with the traditional antenna for perceiving economics, and I definitely appreciate the throwback to Locke, Smith, and Marx. I also really like how you introduce services in contrast to property and like your use of “palliative risk-management”. I think more needs to be done to raise awareness of this type of thinking. In economics education, it’s too easy to lump “Goods and Services” as a be-all, end-all for consumption. I believe this should also apply to the idea of goods as property, which can be consumed with or without destruction. Point being, there is little distinction (in economics education) between consuming 1) services, 2) goods (with destruction), and 3) goods (without destruction) when everything is subject to a “monetary isomorphism” for the purpose of exchange. Rational choice? Hardly…
I am tuning in to your idea of identity and am very interested in seeing the fallout of using this as an alternative to traditional economic approaches. On a final note, though I feel I am just scratching the surface of your ideas of “risk and anxiety” and “identity”, I think it may be an alternative way of phrasing the “Economics of Fear”, which as I mentioned in a comment on Larry’s proposal is something I have been contemplating for the past couple of months.
I hope to learn more.
~BH
Thanks Bob – I’m looking forward to a great discussion! I feel I’m scratching the surface too. I’m no economist (although I think right now everybody can become economists!), but I’ve been interested in the relationship between human experience, identity, technology and institutional organisation for a long time. Much of the economic thinking has been prompted by a change to the funding of Higher Education in the UK (no more state subsidy for fees; I got free University education and a maintenance grant only 20 years ago!). I find the idea of exchanging money for education is fascinating!
p.s. Glad you’re enthused about NetLogo.. I strongly believe cybernetics is really about playing with machines!
p.s. Glad you’re enthused about NetLogo.. I strongly believe cybernetics is really about playing with machines!