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Complexity Politics - Recalibrate Models in a Loop

Unser surfs on the waves of complexity. However, it tries to master it by the intelligent interplay of instruments, agility and adaptivity ... And thus, cut through the waves in certain situations. 

The century of complexity

Structural changes are complicated, but system changes are complex. International relations are complicated, but global civilization is complex. In complex systems, crises are not simply cycles, but operational accidents with often catastrophic consequences.

"The 21st century, is the century of complexity", said Stephen Hawkins. In fact, the physics of geopolitics, economics, social systems ... with its striving for equilibriums is replaced by a physics of complexity. Never before did we have smart connected things and processes. Never before did we have smarter methods and tools. Never before have we lived in multipolar, multi-civilizing orders. The biggest system change: shifting state-centered orders into an arena of multiple agents.

There's one big thing that's atop the details: there's no significant payoff of any political change, without quantitative political engineering. Policymakers having lost their abilities to sustain decisions need deep understanding of positive feedback, free agent complexity, the complexity of risk, the limits of probability, the impossibility of predicting future. But the need to know, how to write future instead.

Free agent complexity

Socio-economic systems are determined by the mutual behavior of agents. Interacting agents are producers, investors, consumers. They constantly change their strategies and actions in response to the result they produce reciprocally.  A more difficult constellation is hardly conceivable.

Multinational or transnational?

Multinational corporations have a fixed headquarter. But smart affiliates think transnationally in a network of market participants, partners and company networks. They see the world through the lens of supply and demand, without nations. This is close to the concept of fluid dynamics in physics: flow and friction of solids, liquids, and gases. Flow and friction determine the ability of the offers to meet the demand. Resources, goods, capital, technology, work, data, ideas ... flow, constrained by borders, conflicts, sanctions, rules, protective rights ...


In this complexity, markets are no longer places, but the exchange itself.

Writing future

Complexity politics need to thinks less in concrete goals and structural principles, but in their patterns. The usual forms of political expression (geopolitics, social, economics ...) are to be replaced by making, reacting, and renewing. Write, not predict future. On the basis of models, simulation, adaptation ...

The way to do it will be the orthogonal organization of instruments, models and methods and calibrating the driving parameters in the loop. Frequent recalibration. Remember, surfing on the waves of  complexity and cutting through them model-driven.

Not an easy task .. but indispensable.

Product Risk Qualification

The UnRisk Omega cooperation is working so amazingly well. Remember, what we had in mind, when launching UnRisk. UnRisk Omega is the co-creation of multilateral and UnRisk. It's all about risk-informed investment management. And it sets the pace by combining the latest theories with practical requirements:

Read about their latest achievement here.

What is the PRC?

The product risk classification (PRC) is a risk indicator that is based on quantitative models. It allows us to compare the financial risk of investment products of different kinds and asset classes. The PRC is a risk measure for single instruments, which does not consider portfolio aspects. It can be based on historical data and thus can vary during the lifetime of a product.

Fulfill regulatory requirements 

The product risk classification is another building block for fulfilling requirements such as FIDLEG or MiFID II, which require checking the suitability and appropriateness of proposed investments as well as providing the customer with transparent and comprehensible information on all risks connected with the proposed investment. From a regulatory point of view, the PRC becomes important as soon as an advisor needs to assess whether a client is able to bear the financial risk of a specific investment product.
Do things from complex to pragmatic. One could also call this: Reverse Innovation.

Payoff

I've just read this book in one sitting. It's about the hidden logic and the bigger picture of motivation. it's using stuff that has been presented in Dan Ariely's other great books. But it ties them so intelligently together, that I recommend to read it even if you have experienced the other books.

After I've dived deeper into politics, especially into the co-evolution of economy and labor (in its full complexity) it became more clear, how easy it is to destroy motivation and how difficult is to build. The subject is far more complex than we ever imagined.
It's worth investigating the nature of motivation, our partial blindness to the way it works, and how we can bridge this gap.
Oh, yes.

The Workflow Of The Book

The workflow of the book in a nutshell. Incidents - Progressive Problems - Resolution in telegram style. 


A politics that fixes what it eventually broke


Politics must be agile and adaptive. It must be developed evolutionarily. In a balance of structural and behavioral change. As a system that becomes stronger under stress.

Political Engineering

Political engineering by means of paper decay can not depict the complexity. It requires new interaction patterns and technology support.


Quant Politics


Provided the complex state wants to reach its national targets, it must quantify. Supported by methods of econometrics, engineering, physics, mathematics and programming.


Once there was a fisher and a farmer


First was the exchange

A fisher and a farmer exchanged a trout for carrots. Asynchronous deliveries forced a contract between a creditor (the fisher delivered in autumn) and a debtor (the farmer delivered next spring).

Banks were established

Because there were many networked exchange contracts of that type, it was obvious to transfer the central creation, storage and settlement to clearing houses. Banks.

Money was created

Money was created by standardization of these contracts. Banks record all transactions and multilateral relationships between creditors and debtors applying double-entry bookkeeping.

Money out of nothing

A bank lending money, draws it out of nothing. This money can be put into an economical circulation. If the great-granddaughter of the fisher, a salmon breeder, buys a yellow convertible for 50,000, she creates branched income.

Central banks were established 

Provided the bank of the salmon breeder  resides in Vienna and that of the car dealer in Milan this leads to a quadrangular relationship of reciprocal claims and obligations. Interwoven money transactions between and with banks are supported by a clearing house. A central bank.

The money system is programmable

Money is solid as a storage for values and liquid as a medium for economical transactions. Consequently, it's programmable.

The money goes to?

Real investment: provided the great-grandson of the farmer borrows 200,000 to create a chili-production, he immediately generates income in a certain economy. Future income can serve the debt and interest. 

Speculative investment: provided the salmon breeder lends 200,000 and buys a house to resell it later more expensive it only generates wealth. If the house price falls, she can only pay part of the debt and interest.

Real investment hardly leads to debt crises. Speculative investment can lead to bursting bubbles. 

Main Street  and Wall Street

Real futures and real options could maximize the value of the investment project of the chili producer. The models come from Wall Street.

Once there was a profession and a job - lifelong


Complexity economy

If markets are saturated by chocolate, people buy nuts. Chocolate does not yield any more. If a coveted luxury chocolate appears on the market, this can create a new boom for the mass chocolate. This positive feedback describes the complexity economy.

The future of work

If education can't win the race with technology, human labor becomes less and polarized (super-brain or muscles?).

The big picture of work

Work satisfaction is determined by income and fulfillment. Two-dimensional working types: SLAVRY/ HOBBY / FACTORY / LAB. The type lab offers the highest income and with the greatest possible fulfillment.

Income or wealth?

Income determines the coevolution of labor and economy. Many improve their income situation by pooling, sharing and distributing income. This is regulated by law total economies.

Three rights can make a wrong


The change curve

The salmon breeder wants to reorganize her company from functional to divisional (markets-centered). The project is well prepared, the teams are trained. Nevertheless, many behave as before. Uncertain future inhibits them all.

Innovation risk

Complicated models describe a real behavior better. But they bear a higher risk of usage. The key to accepting an innovation is to optimize its risk.

Work more with artists

Artists deal with risk, insecurity, imperfection and criticism better.

Capitalism or free market?


The market is the exchange itself. It is innocent - but rarely free. In order to accumulate capital, dominant market players exclude market mechanisms by means of a planned economy. Isn't this paradox?

Management of the wealth pool


In the complex interplay of individual and total interests, the state must manage a positive development. This needs quantification.

It's our turn


Stop indirection

Indirect (representative) democracy is a detour. It leads to alienation of the political cadres from the people. We have to co-determine. We do not have the detailed knowledge?

Explorative learning

But we can learn from turbulences. Every form of school must empower learners to explore thought principles, insights, and skills enabling them to live freely in an open-minded society... able to innovate...

Technology

Better decision-support systems by technology guarantees an effective direct democracy.

Unconditional basic income

We all have values. A useful basic income serves as a social net and economical trampoline in one.

The no-problem problem


The continuous looking after dangers does not allow any no-problem phases and the soporific we-are-great often leads directly into a crisis.

The Payoff



What's the controlling idea of a new political engineering, based on quantitative politics?

Politics of sharing

A quantitative politics that strives for human emancipation. It's goal should be freedom - not equality. Its basis: to write new contexts into the socioeconomic systems. It requires adaptive models.
Quant politics surfs on the waves of reality and changes them with their navigation
A new evolutionary, left-oriented, quant politics thinks internationally, develops bottom up and promotes decentralized decision-making structures. It's not fighting free markets but capitalism-without-adjectives. it's not protectionist. It merges, shares and distributes.

I've a dream

I don't understand left-oriented politics as a moral principle, but as a calculus of intelligent selfishness. It means putting action into a higher context. Not an anti-business movement, but a free-markets movement. A movement of open innovation and sharing.
It's our world, our coexistence, our control, our responsibility, our learning, our development, it's our methods, our tools - it's our evolution
It's possible with existing instruments by just adapting and codevelop them with quantitative systems.

I've worked hard for over a year, explained complicated things, went into details, introduced examples and little stories and worked out project ideas for immediate realization.

This is a compilation. But I'm offering presentations an workouts providing full explanations... for free (if time allows for... ).

A New Physics of Politics

I've continued working on the Unser platform. I added Background information and a Summary.

A New Political Engineering

I got freed back from readers and focus groups and not so surprisingly it turns out that business people are interested. Probably more than politicians? Because it touches a new Physics of Politics … in the century of complexity. A new politics that enables a new political engineering based on more quantification.
Will the last decade be remembered as the time of the revolt of the underclass? With a strong political bite? Fed by deep insecurity? With a cry for change? But which one? Do we have any answers? Can we explain the geopolitical, socio-economic system without understanding the underlying new "physics"? The physics of complexity?
Indeed, the physics of geopolitics, economics, social systems ... striving for equilibriums is superseded by the physics of complexity. Never before did we have smart connected things and processes. Never before did we have smarter methods and tools. Never before have we lived in multipolar, multi-civilizational orders. Never before has so much of what is "us" been made of "them" and vice versa. And all this without a regime. The biggest system change is shifting state-centered orders into an arena of multiagents. To understand this, we need to understand evolution, coevolution, positive feedback, also called "butterfly effect".

Don't predict future - write it

Politicians, economists, and sociologists feel less comfortable with the notion of complexity, such as physicists, biologists, computer scientists, or mathematicians, who are more likely to tolerate all forms of life only at the narrow phase boundary of chaos and order. Without stable equilibriums.

Complexity politics requires a different way of thinking about politics itself. As a politics that is constantly being redesigned and adapted. A politics that is less thinking in concrete goals and structural principles, but in their patterns. The usual forms of political expressions are to be replaces by making and renewing. Don't predict future, but write it. Empowered by models, simulation, adaptation …

A Herculean task. The book provides insights, ideas, and political directions ... but I hope it will be much more: a living platform ... serving a Quantitative Politics community.

To get it running, I offer free individual presentations and workouts. For business people, who will be touched by the changes and better influence them rather than react.

Always Cooperate

If I've to describe all my experiences in a single controlling idea ... make a recommendation for innovators in a few words: Don't do it alone. Innovators want to make systems that matter for those who care. This isn't different in politics. It requires clever Focus-Stretch-Expand strategies. Therefore: always cooperate!

Don't develop alone

Only an agile development cycle driven by partners can master the complexity of a quantitative politics, applying multis-trategy, multi-model and multi-method systems. We never had better environments, platforms, and tools for development. But never before had international relations been so complicated and global civilization so complex. Never before have we had smart, connected things and processes. The complexity, however, consists not only in the large, but also in the small by free agents.

Complexity-politics requires a different way of thinking about politics itself. As a politics that constantly reengineers and recomputes itself.

Don't promote alone

Innovations must organize a change. Maybe systems need to fix, what they eventually broke. To promote a change requires early connections and alliances, going far beyond the cooperation in agile development cycles. It needs the support of recognized voices from politics, social affairs, economy, business administration, culture, education, science, media ... best integrators who can speak for the project in the early stages.

An innovation chooses itself. But it will be only adopted when it becomes connected and integrated.

My offer

I want to offer an open platform serving a quantitative politics community. Inviting members to think ideas further, transforming them into projects, discuss related topics… Unser. It starts in German, but I hope to make it international.

What it is all about: build a politics that works. Make parts of it computational, develop a political discourse language that can be implemented… Think of political engineering as the design of institutions that represent programmable rules. This will represent the new physics of geopolitics and global economics better.

My Offer - I've worked hard to explain complicated things, worked out the required details and included some project ideas… My offer is a platform with book.