News From UnRisk

UnRiskers have relaunched their home page. It's now presenting the orthogonality of solutions, products and the technology stack even clearer.

You know that I find this a reference for quantitative innovations that work and sell. A technology stack that leverages the transformative development of products and solutions. UnRisk technologies are multi (programming) language, inherently parallel and platform agnostic. They combine symbolic programming with the most advanced numerical techniques and enable to co-build, co-create and co-evolute new things with an unprecedented low effort…

UnRisk Omega a reference

UnRisk Omega is the co-creation of multilateral and UnRisk. It's all about risk-informed investment management. It's computing millions of prices and risk spectra on a scalable grid to support investment decisions and with its tablet font-end it goes where its users go.

To me UnRisk Omega is a reference for the intelligent combination of computational knowledge and context technologies.

Complexity Economics

The classical macroeconomics is permeated by the idea: rational actors work in a world of equilibria. In this world of thought, it is only logical that bubbles are not accidents but cycles - or fluctuations.

And there's no doubt, it has often helped us to take a simplified view of economics being a "machine".
But if we are looking for an adequate politics that responds to new challenges, we need to draw a more realistic picture of the economy.

The complexity economics develops evolutionary - not solely on the basis of computational knowledge, but by tinkering, experimenting, discovering, discarding, remixing...

Game Changing

In this view, markets are "played".
If the same always win, the game becomes boring before the game rules are changed 
And that feeds my totally immodest idea to outline a politics that is not based on existing idols.

What does all this mean?

If markets are saturated of chocolate, they turn to, say, nuts and selling more chocolate becomes too expensive. This opinion is still widely used. Income per unit declines with increasing market saturation describes this theory in short.

But, markets may get info about an excellent quality of cocoa beans at the "foggy southern slopes of certain mountains of Venezuela". Luxury vintage chocolate is made of them. These new brands in the high-price segment meet an already developed market and the margins increase along the saturation. Vintage chocolate that gaining market share find it easier to get more market share.

The theory of increasing returns

You'll find a great rationale about this in Brian Arthur's papers and books.

The theory of increasing return applies in many sectors or even regions, but it's central in the "high-tech" economy. These products have differentiating principles. They provide frameworks and platforms to build innovations atop. Often they are solutions and development systems in one. Innovations of a type that I've discussed here...

The monopolist is no longer the classic salt monopolist. Working in the "data salt mines" is difficult, but "promising". Data  owners…can define rules, plan moves and design game arrangements for increasing returns

"Complexity" is a key principle of differentiation…and dominance.

Soon, I'll look into the complexity of work.

Fire. The Wheel. Double Entry Bookkeeping

An important inventor might have said that this are the greatest innovations of mankind.

To understand our complex economic systems, we need to dive into many things, but probably start with money. Its hard to believe, but money is created out of nothing by credit (debt). But, this is the fundamental principle that makes money work.

Economics should pay much closer attention to debt - but not as a variable disclosing the dark side of an economy.

Dirk Bezemer, University of Groningen, tackles the important questions and offers a concise and insightful explanation of how money works:

Debt, a great invention

In the following videos he describes straightforward that it's important where freshly created money goes to. Whether it's used to create income or wealth (by speculative investments). Speculative investments cause busting bubble because they run into a reverse price logic - raising prices create temporarily more demand.

But the recent crisis has shown that there is no common sense on how the money policy shall act in response. We've seen money creation by lending, but there's also central money printing. Is it enough? Where shall it go to? What about amount and inflation?

As a system person, I think of the underlying operating system fist. But wait...

Is the money system programmable?

Money is a symbol of credit and debt, as well as assets and liabilities. It's not a thing, not a piece of clay, gold, paper ... it's a contract. We use a bank debt as money and thus keep the economy going, which works in a interwoven form of contracts as the basis of exchange.

It would be trust building, if the money system could be understandable and efficiently programmed:

A quick trip to the plateau of abstract programming

In the understanding of the theory of complex systems, a system can be programmed, if it's solid enough to save and liquid enough to transform.

Computers store data and transforms signals. In a modern form of programming, Symbolic Programming, higher symbols are treated like data. Symbols are mathematical expressions, geometric objects, graphs...even programs.

Recently, a Digital Currency Initiative, with a strong commitment of the Media Lab at MIT, was established to explore whether a system can be built that treats money like data. Digital money, as Bitcoin, is already available. However, the initiative wants more.

They want to find out whether a user controlled technology such as the Internet, could act as a bank, creating money and do all the clearing, but, being not owned by any person, company, public sector…

Our money is capable of storing value and being a media for economic transactions. It should be programmable. But the money policy does not provide or use something like an operating system, a system that operates between the money system and its applications, managing memory, monitors, request and suspends processes, operates undoes…

Storage of value is an central point of the critic…it supports capital accumulation and misbalance, say the critics. If Karl Marx had known the quant finance jargon, he might have said: storing value is a long position that can be used to put pressure on the production system and workers. And in fact it can be used for a fix memory allocation or get processor priorities tar slow down the (economic) system.

I'll come back to this…but before, I'll put some thoughts on the complexity of economy and work…

A River Flows From the Industrial Revolution

I haven't posted for a while, because I started working on a larger concept that is a longer answer to the impact of the complexity economy and innovation to the needs of politics. Yes, I became megalomanic…in a way. I've never worked in a political set-up and I've no education in political sciences.

Innovation is about change. It influences our lives increasingly. But does politics change enough in reaction?

I'm far away from completion of the concept, but I'll share thoughts in a series of posts. Working title: Quantitative Politics.

No chimney smokes without benefit?

Before the era of Industrial Revolution most things were made  at home or in small shops. Individualized products were produced with simple hand tools and devices .

Many people lived an arduous life in mostly rural communities. Industrialization changed everything. Machines produced mass-products in factories. Textile, steel...the steam engine, spawned new systems of transport, communications and banking.

People migrated to cities whose houses were often as black as their faces. In order to redeem more they had mostly toil more. Their work became measurable, observable, clocked…systematic and machine like.

This started an evolution of products and production:


The driver of this era is the mechanization. Mechanisms modified products and production. In a car they determine the function and power of the engine, gears…and bring comfort in, say, windows manipulation.

Mechanized things initiate an evolution of feature-rich, comfortable, autonomous, connected products, which are produced by increasingly autonomous machines and systems.


The historical development of electrification is determined by magnets, dynamos and generators. Electricity "generated" light, heat...and drives motors. It extends the functionality of products and can replace mechanisms. Cars are illuminated and electric motors add comfort to windows manipulation…currently, they replace combustion engines and transmissions.


Computers are not mere tools. They're universal machines controlling products and production by programs. Embedded systems in cars help drivers to drive better and information systems help them to navigate better from A to B.


Cognitizing is the technology of autonomous, intelligent systems, empowered by Artificial Intelligence techniques. The self-driving car is one of its objects of desire. I've posted my view on cognitizing here


Local intelligence allows to process complex information, make decisions based on experience and inference swiftly. Smart self-driving cars are technically better if they've better sensors, faster processors and more intelligent programs. Integrated into an information network they'll move like a swarm optimizing traffic and their own ride.

Connected autonomous systems exchange information among themselves, with the environment and with people. Connected they perform more functions than alone. 

But how smart shall a smart connected thing be? How shall it interact with people?

A tightly coupled, complex system of intelligent subsystems may become a monster. Why? Complex means unforeseen events may happen and closely related, there's not enough time to react.

But no doubt, smart, connected products, services and production live in co-existence, create new things and innovate in co-evolution…

In a regime of connected things and actors terms such as origin, use, add-on…may blur and the coevolution of labor and economy may have unintended effects on value, price, property, exchange, utilization, market, money...and risk.

Do we have instruments helping us to combat eventual excesses? Is there an adequate policy?

I'll look into this things through the lens of an amateur in economy, social affairs and politics.

I'll touch the complexity economy and the future of work, factory and lab work, income and wealth, ask myself whether our money system is programmable, how rights can make a wrong and sketch a path to make change happen…I'll think again about the key to innovation…and come hopefully to a political framework.