Complex Systems Notes 2: Political Management Risks and Comparative Systems
Summary
This is part two of a series on a conceptual model of politically-managed systems and their positive polarity dynamic. Understanding politically-managed systems may help us chart their potential trajectory and plan better for our economic future.
First, we examine policy interventions generated by politically-managed systems with high risk of adverse outcomes; in extreme cases such policies can result in devastating crises including genocide.
Next is a comparison between politically-managed and economic systems as a possible guide for humanity and improved civilizational outcomes. The Appendix also provides additional clarifications and definitions.
For extended detail on underlying drivers of the positive feedback loop of political management see a later study on econobiology (Kennedy 2022c) linked here.
Overview
A fundamental characteristic of a politically-managed system is its positive polarity which consists of positive feedback loops that are self-reinforcing and inherently unsustainable, expanding interventions into the economic system to broaden political support and funding. Initially, especially in high-growth economies this self-reinforcing dynamic may not be fully perceived but continues until an overshoot and later phases when the confluence of adverse outcomes caused by politically-managed policy interventions and unconstrained spending culminate in breakdowns involving potentially devastating social, financial and possible monetary crises particularly in later phases. Economies may be impacted to varying degrees; those with overvalued exchange rates and weak productive capacity may face far more devastating later-phase breakdowns.
This Part 2 begins with the more dangerous policies of political management in the next section, then compares politically-managed systems with economic systems. Importantly, it may be erroneously assumed that resolution of problems consists of simply applying the appropriate punishment vis-à-vis the entities and actors involved in these tragic outcomes. However, a crucial thesis of this study is the systemic aspect: The dynamics of politically-managed systems that inherently drive adverse incentives and behavior impede fundamental resolution and therefore tend to self-perpetuate.
It should be emphasized that the model is not to be viewed as categorically “correct”, but as a guide for possible outcomes. Also see the Appendix for additional clarifications and definitions.
High-Risk Policy Interventions
Political management consists of three basic subsystems as shown in the summary table next: Subsystem 1 redistribution, subsystem 2 fiat or overriding law, and subsystem #3 monetary system.
Table 1. Subsystem Summary with Phases
Although all subsystems play a complex interwoven role in the dangers of policy interventions, many of the most potentially dangerous policies may be found in Subsystem #2, fiat or overriding law (shown in Table 2 next; due to space limitations only the left half only to Column E is shown). This subsystem is designed to establish interventions and regulations that grant certain groups and special interests legal monopolies and other advantages in exchange for their support for the representatives of the politically-managed system. The dark circles in the first column indicate policies that carry a high risk of a dangerous outcome. The figure “1” in the table refers to a likelihood of a particular outcome taking place, but not necessarily a certainty.
Table 2. (Subsystem #2: Fiat/Overriding Law, left portion of table)
A few key subsections will be detailed below together with the table.
Price Controls (Subsystem 2.1). Price controls are part of Subsystem 2’s overriding interventions but there is a critical linkage with the monetary system (Subsystem #3). Monopoly currency debasement can lead to inflationary pressures which may prompt political managers (policymakers) to institute Price Controls (Subsystem 2, Sub 2.1a). When price controls are set below the cost of production, particularly in agriculture and food production, catastrophic outcomes are possible, including hunger and famine.
Political Capture by Special Interests. (Subsystem 2.3 a-d). This is the crux of the politically-managed system which can manifest in various ways, typically involving some form of alliance between special interests and political managers. The politically-managed system is the vehicle for special interests to advance their agendas or business in exchange for giving their political support and political campaign funding. Important: This process may also be closely intertwined with Subsystem 2.3d, the granting of legal monopolies and Subystem 2.5c liability protection/legal immunity.
Systemic Underpinnings
Perpetuation. The self-reinforcing dynamic of positive polarity tends to perpetuate problems to justify the need for the political managers to continue fighting these problems with more controls and funding for special interests. The systemic complexity may make this contradictory dynamic opaque, and all of us (beneficiaries and victims of policies) may be unaware of what’s happening. Accountability is also opaque due to a possible power-sharing dynamic (see the Appendix), the role of bureaucracy (Berman 1983), and possible future reliance on artificial intelligence as a justification for escaping accountability.
Monetary Monopoly (Table 3). It should be emphasized that many of these policies of the first two subsystems cannot continue without Subsystem #3, the monetary subsystem, especially when taxpayer funds are dissipated. Monopoly currency and currency creation provide artificial liquidity (funds) to cover politically-managed expenditures; this dynamic can allow destructive policies and management to persist longer than otherwise possible. Monetary policy and central banking also may play a key role in long-term economic decay via the unnatural widening of borrowing spreads (Kennedy 2020). Debt Monetization. Monetization of debt issuance and manipulation of the cost of debt are key features of this subsystem; low-cost debt and expansion of currency units can secure support for the political system initially but breaks down in later phases: Debasement of the monopoly currency benefits special interests (in particular asset holders that rely heavily on debt as well as politically-managed debt/government obligations) by inflating away the real value of the debt, but the poor, fixed-income and middle-income earners are especially hard hit; attempts to help the poor with the creation of more currency units add to the inflationary pressures and weakens purchasing power, further impoverishing the poor and possibly contributing to the protests described in post-overshoot phases. Other economic dislocations include eventual debt defaults and financial crises, followed eventually by possible monetary crises.
There is a critical linkage between high inflation and price controls, as noted above (Subsystem 2.1a) and which bears repeating: Political managers/policymakers may respond to inflationary pressures with measures to place a cap on prices of certain goods. Extreme danger is possible when legal prices are set below costs of production, particularly in agriculture and food production, with the potential for catastrophic outcomes including hunger and famine.
Chronic Dependency Amid Unsustainability. Although largely skipped over so far, Subsystem #1, Redistribution (Table 4, next) plays a secular role via the population’s dependence on the politically-managed system and special interests (e.g large commercial and corporate interests) that the system serves, in exchange for political support.
As the politically-managed system’s unsustainability becomes manifest, especially in the later phases, much of the citizenry may have become largely dependent on the system and unable to provide for itself; as the purchasing power of remaining income and funds diminishes or ceases, social breakdown, chaos, and famine may ensue.
Videos: Sub-series on High-Risk Policy Interventions (The video presentations are based on draft documents that may have been significantly updated since; video length given is approximate)
Complex Systems Part 3: Political Management High-Risk Policies 1 (8 min 30)
Complex Systems Part 4: Political Management High-Risk Policies 2 (12:00)
Complex Systems Part 5: Political Management High-Risk Policies 3 (12:15)
Comparative Analysis: Politically-Managed and Economic Systems
Some attempts to restore some of the key features of the economic systems are likely to be made in the event of political system breakdown. However, if political management, whether under various technological control mechanisms or under the guise of decentralization, is kept largely intact, the systemic problems inherent in positive polarity can be expected to persist. As briefly noted in Part 1 of this series, in the latter reversal phase of politically-managed systems, restoration of some features of economic systems may be attempted; however this is distinct from a transition to economic management. Economic management might be better understood by a comparison of the two systems, as summarized in the following video and detailed further in the remainder of this section.
Video:
Complex Systems Part 6: Comparing Political and Economic Management (12:00)
A detailed side-by-side comparison of systems is provided next but can be simplistically summarized here as primarily a removal of legal monopolies (regional management, monetary, judicial, commercial, educational, other) allowing residents and consumers the choice among competing alternatives and economically-managed societies to function. Role of Technology. Technological tools may be a driving force of the development of economic systems that emerge outside of politically-managed systems. This process may take the form of independent management entities that cover disparate areas that are can be both geographically proximate or very distant (Srinivasan 2022).
For further clarification and definitions of terminology not adequately covered in this series Part 1 or 2, see the Appendix.
Polarity and Linkage
As stated in Part 1 of this series, the economic system is described by negative polarity (diagram below, right), and the politically-managed system by positive polarity (diagram below, left). The extraction linkage (arrow in between, representing extraction in two ways a) decoupling and b) monopoly currency creation is shown by the arrow. For details see the discussion next.
Note: The expanded version of the graphic above incorporates the monetary system and is presented in Part 3 of this series Kennedy (2022a, Part 3); that graphic is reproduced here for reference:
Contrast between Systems and Detail. To highlight the contrasts between both systems, economic system features are shown in red font after the description of features of a politically-managed system (italics are also added if the red font does not reproduce).
1.Extraction, draining of resources from the economy by confiscation in two ways, one more visible (1a-Decoupling), one less so (1b- monopoly currency creation):
(a) Derivative Resources/ Decoupling (imputed ownership fee extractions aka taxation) beyond that which would be voluntary and that solely cover the management services being provided for the community.
Linkage (Causal Factor): Systemic Ambiguity of the link between payment and the specific bundle of management services provided. Consider the distinction between paying a monthly subscription fee for an online publication versus paying an unspecified amount based on how much you spend, your income, your sales, an assessed value of something you own, etc., while the specifics of what you the customer are receiving in exchange may tend to be opaque.
—>This ambiguity tends to raise costs to people & businesses in economy, raises income for the beneficiaries of the politically-managed system.
Choice of Community/Regional Management Providers: Choice of Community/Regional Management Providers: Clear periodic residential fees, subscriptions, or memberships to regional (community) management providers. Many types of communities are possible (coops, communes, resorts, self-governing homeless encampments, communities of faith or practice, communities with no particular focus, maritime communities, and eventually perhaps extra-terrestrial communities, etc.) with different forms of payment and delivery of management services depending on the bundle. Some communities may be entirely self-managed and self-owned and incur the management expenses themselves and the costs absorbed by the resident owners. Since payment for these management services is directly linked to the choice of provider, or based on ownership interests*, the concept of “voting” for the provider disappears. *Note on Self-Owned and Managed Communities: Ownership may also eventually be linked to digital communities and tokens, with fractionalized interests. Also see the remainder of this series (Kennedy 2022a) and Kennedy (2022b) on geoeconomic management.
Choice of Security Services (typically by Providers): The community/regional manager typically contracts with security services for inside of their geographic area, likely extending outwards to their own border(s); arrangements from local to wide-area security services expands outwards to as far as national borders. Note that border and national security is a critical element of such arrangements.
(b) Monopoly Currency creation: debases the monopoly currency, destroys purchasing power reflected as a rise in prices (aka “inflation”)
—>Less affordability, benefit to special interests
Monetary/Currency Choice: Consumers, providers choose the currency that best serves their needs (aided by future technological inter-operability)
*In connection with both 1a and 1 b:
Saved (unconfiscated) Resources beyond what was voluntary is returned to the economy, restores the income previously confiscated. Reversal of previously increased costs and lack of affordability
2. Granting of legal monopoly control (including regulatory barriers): Legislation and policies that prevent potential competing entities from offering consumers lower cost and better-quality goods and services and denying consumer access to alternatives.
—>Less affordability, lower quality, benefit to special interests
Consumer Choice Permitted: Allow consumers to choose from alternatives and competing producers/providers that offer their goods and services to consumers. Reversal of previously increased costs and lack of affordability with increased likelihood of quality improvements.
Adjudication Choice (Public Court System): Defendants and prosecution decide on the adjudicating judge(s) towards improving the quality of justice (unbiased outcomes via competition for neutral adjudicators).
Policies and Rule-Making: By the economically managed entities (see Community/Regional Management) for the communities they serve, simply replacing policies established by political management.In lieu of politicians acting as “representatives” for the electorate, attorneys/legal counsel play a more active role in representing citizens/clients individually and as (class action) groups to uphold basic rights and resolve disputes, etc.
Dependency and Self-Sufficiency. In the breakdown of politically-managed systems and transition to economic activity, there is s restoration of real income to those from who it was extracted along with a reduction of the income of beneficiaries of the politically-managed system. Because by the later phases the system has typically expanded to the point that much of the population has become dependent as beneficiaries through the redistribution subsystem and special interest benefits, there is a complex dislocation and reallocation process involved.
In advance of this eventuality, for most of the population regardless of (former) beneficiary status, building some level of self-sufficiency including having marketable skills, services, or goods to offer is seen as vital for when the politically-managed system can no longer be relied upon.
In Sum: In economic systems, elimination of problems is not considered achievable, but the negative polarity of economic management has a built-in counterbalancing/self-correcting dynamic that tends to respond to problems by managing them towards resolution.
Sources by Topic. The following list is reproduced from Part 1 of this series: A sampling of sources in the References that generally relate to topics detailed in this study. Note that there is some overlap among sub-topics below, and the listing is not comprehensive.
Extractions. The draining of resources from the economy is achieved by confiscation in certain ways, some visible, others less so; some examples: (a) Derivative Resources (based on imputed ownership fee extractions): The fees extracted are potentially far beyond that required to cover the actual costs of the community/regional management services delivered, and that exceed voluntary consent (simplistically referred to as taxes). Excess extractions raises costs to citizen-residents and non-beneficiaries and raises income for special-interest clients/beneficiaries. (b) Monopoly Currency creation (also re: debt monetization): Financing of public debt issuance, debasement of the monopoly currency, destruction of purchasing power reflected as a rise in prices (aka “inflation”): This leads to less affordability, but benefits special interests (re: Fiscal policy, public/corporate debt, money and banking system: Alesina 2013, Bank for International Settlements (BIS) 2015, Barro 1974, Barua 2019, Bird 1974, Borio 2014, Brainard 2015, Cantillon 1755 , Christ (Carl) 1968,1979, El-Erian 2016, Fabozzi 1992, Fitzgerald 2019, Grant 1996, 2008, Huerta de Soto 2012, Juselius 2017, Kennedy 1998, 2020, Kotlikoff 2015, McKinsey Global Institute 2015, Mitchell 2017, Rothbard 2008, Shedlock 2017, Sigurjónsson 2015, Spitznagel 2017, Takeo 2017, White 2013, Wicksell 1898; on bank accounting (FASB) see Kenton 2020, Meinert 2015. *Note: Extractive income sources may also include arbitrary fines, penalties, and other types of confiscation (e.g., civil asset forfeiture); extractions may also involve the return of currency that has been created (re: monopoly currency creation).
2. Granting of legal monopoly control (including regulatory barriers): Legislation and policies that prevent potential competing entities from offering consumers lower cost and better-quality goods and services: This also tends to lead to less affordability, lower quality, and benefits for special interests. (re: rent-seeking, Krueger, 1974, Tullock, 1967; price controls Coyne 2015, Murphy 2022; (regulatory) bureaucracy and special interests Andrews 2017, Baumol 1965, Berman 1983, Clifton 2021, Eisenhart 1989, Herrick 2016, McGillis 2019, Nordhaus 2006, Shedlock 2017.
Ideology, Education, and Indoctrination can play an important role to provide support or justification of systems, and/or as part of collaboration with special interests and groups; a non-exhaustive list found in the References: Bauer 1981, Brave Heart 1998, Crawford 1982, Gatto 2000, Goldberg 2009, Hayek 1944,1981, Hoffer 1951, Lofchie 1978, Marx 1867, Mill (John Stuart) 1859, North 1989, Quarcoo 2021, Rake (1975), Rawls 1999, Reisman 2014, Rummel 1997, Rushdoony 2012, Schoeck 1987, Schultz 1978, Solzhenitsyn 1973, Sowell 2007, 2010, Tucker 2017, Young 1982.
Systems and System Dynamics. Systems of political management can be observed from a broad number of perspectives and geographic localities, including business/commercial, economic, financial, governmental, historical (d)evolution,, law/legal/judicial, monetary, and social: Antonopoulos 2017, Aristotle c.350 B.C., Barzun 2001, Bastiat 1850, Bauer 1981, Becker 1976, Bell 2014, Benson 2011, Burja 2020, Christ (Carl) 1968,1979, Clarida 2017, Clifton 2021, Codevilla 2021, Coyne 2015, Denison 1974, Eicher 1982, Eisenhart 1989, El-Erian 2016, Fama 1983, Ferguson 2014, Forrester 1971, Friedman (David) 2001, Grant 196, 2008, Gulbransen 2017, Gurri 2018, Higgs 2013, Hoffer 1951, Kennedy 2017, Kotlikoff 2015, Leoni 1961, Locke 1689, Lofchie 1975, McAfee (Andrew) 2019, Mill (James) 1808, Mill (John Stuart) 1848, Mises 1920, 1931, Murphy 2022, Perkins 2005, Petersen 1982, Quigley 2004, Rake 1975, Rauch 1994, Ricardo 1826, Rickards 2017, 2021, Rifkin 1996, Ropke 1936, Rummel 1997, Rushdoony 2012, Sanandaji 2015, Sandis/Taleb 2014, Schultz 1978, Serra 1613, Smith (Adam) 1776, Solow 2010, Solzhenitsyn 1973, Srinivasan 2022, Stevens 1981, Stockman 2013, Theil 2014, Van Creveld 1999, Van Der Pijl 2022, Voslensky 1984, (de) Waal 2016, Walker 1888, Zinn 2015. On Theory of Systems: Fetter 1914, Fisher 1930, Forrester 1971, Hayek 1944, 1981, Grice-Hutchinson 1952, Hazlitt 1960, Keynes 1936, McCloskey 2017, Olson 1971, Rawls 1999, Reisman 1996, Sandis/Taleb 2014, Say 1803, Schumpeter 1954, Smith (Adam) 1776, On modeling of systems and events, Bar-Yam 2017, Cirillo/Taleb 2015 (on conflicts), Cook 2008, Cooke 2014, Dixon/Jorgenson 2013, Douady 2012, Fellman 2016 (on conflicts), Leamer 1983, Lucas 1976, Neumann 1946, Romer 2012, Sayama 2015, Taleb 2017, 2020, Wickens 2011. On the pricing system and distortions: Coyne (price controls) 2015, De La Calle 1544, Friedman (Milton) 2001, Hutt 1983, Kennedy 2020, Perry 2017, Schultz 1978, Stigler 1987).
APPENDIX
Clarification and Definitions of key terms and concepts are provided in this Appendix.
1.Politically-Managed Entities, that can exist in one or more jurisdictions of politically-managed economies, and typically involve the granting of some form of legal monopoly: 1.A politically-managed regional management entity (e.g. broadly referred to as governments, from localities such as municipalities to larger jurisdictions); 2.A government agency (in charge of something that is nominally in the "public interest" such as "health" and "medicine". In some cases, the agency or some members may have financial interests in the activities of an industry that it regulates or closely works with; 3. The public school system; 4. The Courts: (the public court / justice system); 5. A Combination: Alliance between two or more types of politically-managed entities and special interests.
2. Legislation. In economic systems the economically-managed entities establish their internal policies for the customers and communities they serve; this replaces the legislative system of politically-managed systems principally designed to serve special interests under the guise of the will of the people, etc.
3. Real income refers to income after the cost of living rises from inflationary forces unleashed from the interactions between subsystems of political management. When currency debasement-induced inflation declines, real incomes and purchasing power are expected to rise.
4. Special Interests and Political Management
There are many possible examples of the alliances including commercial, ideological, and other political interests, with various possible overlaps. Costs, Benefits and Incentives. The key political levers are changing incentives by lowering the costs (e.g. penalties) of certain behavior (thereby raising the benefits from engaging in this behavior), or by raising the benefits/returns of certain behavior directly by some form of subsidy or compensation including “bail-outs.” Commercially: Govt contracts and monopolies are granted to businesses (more likely large corporate interests at the national level); this can include non-governmental organizations that might be operating on behalf of other businesses. Ideologically: An external organization with possible sympathizers or supporters within parts of government with power; the arrangement develops either overtly or secretly to promote an ideology or religion --initially many may have good intentions and feel moral in their convictions to use force to accomplish their goals. Note: The alliance typically involves a small number of individuals with an agenda and should not imply that all members of a particular faith or organization are complicit. Politically: Could be a competing political party, or a politicized union that will give their support for certain aspiring political managers (candidates) in exchange for support of their aims and agendas which may link to other interests (ideological, political, governmental, or commercial in some combination).
Detail. Some characteristics of special interests in alliance with political management are detailed further next. Commercial Special Interests. Legally, the state prevents consumers from choosing products and grants a monopoly to certain companies, and controls the money given to businesses for their monopoly-granted products. This barring of consumers from access to products may be justified as consumer protection. Or the government contracts with the companies to purchase the product and distributes it to consumers (or patients, etc.) on behalf of the company with the aid of corporate media advertising, promoting the products like a business. This is part of political payback to the special interests that have sponsored their political campaigns and to ensure that their political party will continue to receive donations. Examples of the alliance between politically-managed entities and commercial special interests are numerous, and can involve the granting of contracts, licenses, approvals, funding, an even immunity (this is detailed in Subsystem 2.5c legal immunity): By legislation or tacit approval and cover-ups by complicit agencies, companies are protected from liability for damage and injury that their products cause to consumers and others. This politically-managed dynamic can lead to more maiming and loss of life than would otherwise occur.
Industry Examples are briefly given here for some context. To preface this section, it should be emphasized that businesses and corporations may sometimes be characterized as inherently “evil.” This is not considered correct due to the crucial role that politically-managed systems can play in helping create additional incentives for businesses (as well as governments and individuals) to take self-serving yet damaging actions that they might not otherwise take. A politically-managed system can allow various kinds of injustices to be perpetuated potentially at the expense of human lives and well-being. Also see the section below on Profits and Political Profit.
Pharmaceutical/biomedical industry: Legally there may be limited or no liability for products, treatments, or injections that hurt or kill people. Meanwhile, patent-holders of technologies may earn substantial income without bearing the costs associated with their products. Chronic dependence. More insidious are incentives to perpetuate illness in some form to secure recurring income; more specifically, under the guise of “treatments” or “protective” therapies, advanced bio-medical technologies may serve to bypass the immune system or other functions in such a way that depletes key immune system defenses to ensure that recurring treatments/therapies be administered to help the patient (ensuring the recurring source of income for the businesses involved; also re: chemical dependence/chemical slavery). Suppression or willful ignorance of information on improving health and immune system defenses by natural means (e.g. diet and nutrition, hydration, sleep, rest and recovery, etc.) may also play a role. Biological Attacks (may also apply to nano-pharmacological, nanoparticulate attacks targeting biological or neurological functioning, or electro-magnetic pulses to target cognition and behavior, etc.). Other highly dangerous self-serving incentives that threaten individual, national, and international security and freedom are biological gain-of-function attacks that are not met with honest, swift, and severe repercussions and prosecution of the suspects involved. A critical question arises as to the development, production, and distribution of “antidotes” for such potential attacks as part of a planning process; an oft-proposed solution grounded in the idea that the profit motive is the source of the problem is to rely on some form of non-profit status. Superficially this appears to solve the problem, however politically-managed incentives mean that the polarity dynamics remain unchanged—organizations that claim to have no profit can still operate (knowingly or unknowingly) on behalf of for-profit companies that capture any profits to be had indirectly. Although likely to be overlooked, the fundamental issue is not about profit per se but profit derived within the systemic, politically-managed context (later defined by the author as pathological profits; also, since the profit motive remains a critical force among the conditions necessary for continued supply of life-saving products, then what is the underlying systemic source of the threat? The danger lies in politically-managed systems that simultaneously can allow for profits to be made while lowering the cost of (penalties against) criminal acts. How are costs lowered to benefit the perpetrator? Initially, by non-response (or willful delayed response) to such attacks, or via unwarranted leniency later. In sum, biological/chemical and other attacks should be treated as criminal matters for law enforcement and defense including upholding the natural right of the self-defense of individuals (also re: planned pandemics; see the next section on defense).
Defense Industry (often referred to as the Military-Industrial Complex in a national context). A few clarifications: 1. The preservation of perimeter/border, national and international security are considered essential; “perimeter” includes the preservation of individual security from physical/biological and other threats to autonomy; defense at the local level may be defined as security providers/law enforcement. 2. If the products of arms manufacturers are not defective there may be no basis for a liability claim. 3. Due to technological advances the blurring of lines between types of warfare may mean that the participation of multiple industries may be essential to maintaining a proper defense at all levels and jurisdictions.
The systemic problem of concern here is the dynamic in which contractors can potentially receive more business the greater the conflict, enemies, and war, whether real or manufactured. A politically-managed system provides an incentive for these special interests to support political management that favors more (domestic or global) conflict and instability. This can lead to more loss of lives than otherwise. How? There may be instances when a militarily strong defensive posture, diplomatic means, negotiations, and peace settlements are clearly viable options to resolving conflicts thereby saving lives, but that are ignored or discouraged because such an approach would not benefit special interests and could even lead to reduced funding and fewer contract deals. Food industry. A few examples are provided. Regional monopoly contracts are granted to companies typically in connection with a government aid program. Pricing may largely be determined by funding through the program, not by costs. Since there are few if any competitors to that regional monopoly within the geographic area, consumers can also suffer from poor quality. Moreover, if funding slows or a monopoly-granted company has a supply chain, production issue or product recall for safety reasons, shelves may go empty as no alternatives are legally permitted. In some cases, the justification for granting monopolies may be domestic self-sufficiency in production, but politically-managed reliance on a single company fragilizes the system and can lead to severe shortages due a single point of failure. Redirected Food. Policy interventions to redirect food production for non-alimentary purposes may benefit special interests but may reduce the supply of food more than would have otherwise occurred, leading to shortages and higher prices. Price Controls (Food). This topic is covered in the main text on the potentially catastrophic consequences of price controls on food production. Tech industry. Although not necessarily a valid claim, as an example: political support may be deemed necessary to prevent liability from claims of over-exposure to harmful electromagnetic radiation and artificial intelligence that can effectively manipulate minds, as well as the declining mental and physical health of younger populations. Moreover, the technology industry may have a strong incentive to support political management that favors use of their technology to track and trace individuals in a type of control grid that can lead to the construction of totalitarian systems and digitally institutionalized slavery. Insurance Industry. The merging of health care/ health insurance and life insurance is not necessarily considered a high-risk activity; however, as with other industries, politically-managed systems may increase incentives to manage the two sectors in such a way that profits can be maximized while ethical considerations are disregarded.
Profits and Political Profit
For ideological, political gain or other reasons, profits have been historically criticized on moral grounds for being wrong or evil but without reference to the system dynamics. Solutions as Self-Reinforcement. From a systemic perspective, the ostensible source of the problem--profit or the profit motive-- is coupled with a ready-made solution that serves to expand the politically-managed control that initially may have contributed to the cause of the problem itself (politically-managed profit). One oft-proposed solution is some form of organizational restructuring that appears to removes profit, such as control by politically-managed entities or non-profit entities, under the assumption that these entities have no profits. However, what is claimed not to be profits may go by another name such as funds surplus or as with many legal monopolies may simply be distributed in the form of increased expenditures to benefit special interests or capital infusions into affiliated entities for which these entities may operate as fronts. Systemic politically-managed incentives mean that the polarity dynamics remain unchanged, as such non-profit organizations can still operate (knowingly or unknowingly) on behalf of for-profit companies that capture any profits to be had indirectly. Although likely to be overlooked, the fundamental issue is not about profit per se but profit within the systemic context. Fundamentally, since the profit motive remains a critical force among the conditions necessary for continued supply of life-saving products, then what is the underlying systemic source of the problem? From the section on biological attacks above: The danger lies in politically-managed systems that simultaneously allow for profits to be made while lowering the costs of (penalties against) actions by attackers. How are costs lowered? Initially, by non-response (or willful delayed response) to such attacks, or via unwarranted leniency later. In sum, such attacks should be treated as critical matters for law enforcement and defense including the self-defense of individuals (also see the sections on defense). Clarifications. Profit is viewed here as a form of savings (whether for business or personally) that results from the difference between revenues and expenses and is physically expressed in cash flow. All or a portion of any positive profit/net cash flow difference can be saved, invested, or donated. Losses can be thought of as “negative” profits or cash flows. In sum, reiterating many of the points made above, a valid criticism of profit is not of profit or the profit motive per se but of the systemic context in which profits can be accumulated by artificial or engineered means (politically-managed) whereby a) costs (penalties) are reduced to the entity or individuals involved, by either preventing or covering losses in some way*, or by granting immunity from liability for damage caused, non-response, delayed response or unwarranted leniency; in a monetary context this can be by maintaining borrowing costs lower than otherwise possible via monetary policy, or b) revenue is raised for the entity or individuals (including patent-holders) from purchases of their product by politically-managed entities (instead of consumers, for example), or providing subsidies, bail-outs or legal monopolies for exclusive access to markets.
*Note. An side example of loss coverage is the use of politically-managed financial systems to continue financing of certain business activities with consistently negative cash flow. The objective could be to keep prices low in certain industries, including those with certain forms of legal monopoly. Because this also increases the credit risk of the lending institutions, some form of politically-arranged backstop including taxpayer-funded government guarantees and/or ultimately central bank intervention may be arranged in the event that financial institutions are no longer able to bear the risk or continue financing.
5. Legal monopoly (Subsystem 2.3d)
Legal monopoly refers to status achieved within politically- managed systems by law or legislative fiat to benefit a special interest that can include politically-managed regional providers; broadly referred to as governments; see politically-managed entities next). Note. Here, a legal monopoly does not refer to businesses that have acquired a large market share in a market open to competitors due to its ability to meet the needs of its customers, or to so-called natural monopolies that have no specially-granted legal status.
Legal monopoly can be dangerous because the granting of monopolies concentrates decision-making and power potentially against consumers who are denied the opportunity to choose alternatives since these are not legally permitted; competing interests are prevented from providing better services or products, fragilizing the system with potentially tragic consequences.
Examples of important legal monopolies are provided next.
a) Legal Monopolies of Regional Management (various jurisdictions)
In some cases, and phases of political management destructive policies can continue without any way for residents to select a competing management company to provide community management services. For example, if a municipality is mis-managing its finances, and no longer maintaining basic security or other services for its residents, there is no legal means for a competing management entity to take over and manage the jurisdiction to improve the lives of the residents, and residents have no choice in the matter except perhaps to leave the community if they can.
Power-Sharing Dynamic and Unaccountability. A legal monopoly of regional management results in the only "solution" being politically-managed: When the situation deteriorates to a certain point, the competing political party is voted in via elections to take over some functions and improve management for their term in political office including legislative changes. However, over decades political management is in effect a power-sharing dynamic with an arrangement of hand-offs to the other political party. Systemically this allows for erasure of accountability as the opposing party gains power from the mismanagement and/or misconduct of the other party, even in cases of egregious acts committed. In sum, political management under democratic politics is fundamentally unaccountable with superficial and temporary “resolution” by power shifts among the power-sharing parties; the potential for perpetuation of injustices and wealth transfer from taxpayers to special interests remains inherent to the system. Note: See Part 3 of this series for the monetary system currency debasement dynamic that drains wealth from savers, those on fixed incomes, and workers.
b) Justice System and Monopoly of Adjudication
The court system is under monopoly control by the regional managers (localities, state, etc. depending on jurisdiction), few if any alternatives are available. This can lead to an inherent bias in the justice system in favor of certain politically-favored groups in exchange for their support or protecting the state itself from prosecution (e.g., use of the justice system as a partisan political weapon). Adjudication choice means that both the defendants and the prosecution may choose the judge of their case, which creates incentives for the adjudicators to compete on neutrality (ability to remain unbiased and neutral); while no system is perfect removal of this monopoly towards some form of adjudication choice can potentially reduce egregious cases of over or under-punishment.
Important Note: A complication is the dynamic of legislation which could politically counteract neutral and unbiased adjudication because legislative action can be manipulated to lighten or toughen the penalties for certain acts to secure votes and support of special interest or groups. This is why removal of monopoly control of the justice system is concomitant with the removal of legal monopolies of regional management
c) Public Education Monopoly
Because parents may not be able to choose from alternative providers or homeschooling networks (typically in combination with restrictive zoning laws in some districts), some politically-managed schools may be less inclined to provide basic services such as: adequate security; or basic skills.
Due to the positive polarity of politically-managed systems, funding for education rises to combat more problems, so the incentives are structured to produce more reasons for funding.
In some societies and communities that do not allow for free choice of schools or districts, there may be agendas within such captured communities that involve indoctrination of various kinds ( unintentionally or otherwise) that can harm children in the long-term as they become adults or distort their worldview in negative ways, This could cause some to lash out at innocent individuals of particular groups (ethnicity, religion, race, nationality, etc.) that they have linked to, or associated with, responsibility for something bad (also see detail on blame-shifting). Note: To clarify, issues may originate from a variety of other non-educational sources including the media, political messaging, family, the legal environment, friends or organizations, or the individual’s own personal biases.
6. Ideological Capture (Special Interests)
Although not typically seen as special interests in the commercial sense, there are ideological special interests that may exert a strong influence on the politically-managed dynamics: Some organizations (or individuals within those organizations) may join with authorities in politically-managed entities to promote and institute certain ideals, narratives, or agendas. The intentions may be to replace competing ideologies for political dominance or may be well-meaning based on their ideals and unconstrained visions to improve society in their worldview, but the legalized use of force via politically-managed decision-making and entities can in some cases result in tremendous injustices and tragic outcomes. Moreover, the political handling of the aftermath, including through the media, can further worsen the situation through cover-ups which may include the practice of blame-shifting (to be detailed below).
Because this form of capture is linked to the legal monopoly of force, refer back to the above section 5, legal monopoly.
Decision-Making and Policy. Some examples are given next that can surface in different parts of politically-managed systems and different centers of decision-making under legal monopoly. Native Americans in Canada & U.S.: Certain kinds of alliances established between members of private organizations and politically-managed entities run by authorities led to decisions to officially separate children from their families for various stated reasons including assimilation; the history is well-documented, with monstrous acts committed (Sugitou 2022 a,b). Notes: 1. It should be clarified that there is a potential of fabrication of certain events for political gain (re: Canada in 2021, see Hall 2023; e.g., ownership transfer of community cemeteries previously operated by towns or Catholic to Native Reserves in which wooden crosses over the graves were not replaced, leading to the conclusion of mass unmarked graves). 2. There are other cases where instead of family separation, ideologies prevail to keep families together at all costs for other reasons, regardless of the clear and imminent dangers faced by the children resulting in tragic outcomes. This, however, is not a reason to entrust such decisions to politically-managed control mechanisms; rather, consideration should be given to voluntary approaches and trustworthy relatives or community solutions).
From a systemic standpoint, the decision-making process may be influenced by the dynamics of politically-managed monopoly control combined with some form of ideological capture by special interests (also may relate to 5b Justice System and Monopoly of Adjudication above).
Forced Collectivization Policies. Ideologically-based policies can culminate in collectivization, mass relocation and imprisonment by physically forcing populations into internment or concentration camps, collectivized agriculture, conscription for war, etc. Historically such actions have potentially led to genocide including engineered famine. (Rummel 1997). Examples from the 20th century include Nazi Germany, Tanzania (re: Ujaama policies of the early 1970s), U.S. internment camps (Japanese-Americans), Soviet Union gulags, China under Mao, conscription policies).
Justifications may be given that may persuade some to believe these actions are for “good” stated causes such as equality, national security, health, and justice.
References: Ideology, Education, and Indoctrination can play an important role to provide support or justification of systems, and/or as part of collaboration with special interests and groups; a non-exhaustive list found in the References: Bauer 1981, Brave Heart 1998, Crawford 1982, Gatto 2000, Goldberg 2009, Hayek 1944,1981, Hoffer 1951, Lofchie 1978, Marx 1867, Mill (John Stuart) 1859, North 1989, Quarcoo 2021, Rake (1975), Rawls 1999, Reisman 2014, Rummel 1997, Rushdoony 2012, Schoeck 1987, Schultz 1978, Solzhenitsyn 1973, Sowell 2007, 2010, Tucker 2017, Young 1982.
7. The Role of Blame-Shifting in the Compounding of Violence
Blame-shifting places responsibility for acts on other unrelated people who had nothing to do with the act(s)... how is this possible? By linking them through some common characteristic such as being of the same religion, race or skin color, ethnic group, nationality, political affiliation (including political opponents), etc. More violence can emerge from this type of political behavior as follows.
Lack of Justice. The outcome of blame-shifting is that attention has been diverted away from the suspects or guilty parties and can mean that some historical crimes go unpunished. Blame-shifting can have the effect of covering for those crimes (including state-sponsored crimes and violence). If the guilty are let free, the lack of justice can embolden others to commit similar acts in the future leading to more victims.
Redirection of Outrage. Another danger is that blame-shifting can create even more victims in a different manner: Those justifiably outraged by the heinous acts may be politically redirected to focus their rage on unrelated innocent people who have no connection to the acts of the perpetrators other than a common characteristic defined during the act of blame-shifting (e.g., having the same religion, race or skin color, ethnic group, nationality, political affiliation, etc.).
8. Decentralization. The discussion to reduce concentrations of political power typically revolves around decentralization that remains politically-managed, not decentralization based on economic systems. The distinction is crucial because if “decentralized” entities remain politically managed, there is no fundamental systemic change.
These results are shared as a public service; if helpful consider paying it forward by adding something extra to any donations made to reputable charities, preferably with priority given to the most vulnerable, including defenseless animals. Organizational reputations may be researched through sites such as charitynavigator.org.
The author may also hold positions in securities of companies, including through ETFs, which may have been covered herein. The discussion and any visuals may contain significant errors, are subject to revisions and are provided 'as is' solely for informational purposes, not for trading or investment advice. This preliminary analysis is exploratory; no claims are made as to the validity of data, assumptions, theoretical models, and methodologies; results may be based on prior data that do not reflect the most current market or other events.
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