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Dear subscriber,

I am very sorry that I have moved to new blog http://tonyphuah.wordpress.com, because after I learned about the insight of “not over-” / “not too much”, Moderation and balance, I think I have moved to new phase of life and a new blog is better to reflect it. I am no longer just “thinking for Sustainability” but “thinking and doing”, moving and idle, balance between active and passive.

Please subscribe to the new blog to keep updated. Sorry for the inconvenience. I will not move the blog again as the new blog is just my name, I will not need to change the name of the blog again if I would move to new phase of life. Really sorry for this time.

I will leave this blog as it is and post new posts to the new blog. So please subscribe the new blog as I will update the new blog from time to time when inspiration comes.

Sorry again and thanks for your interest!

Tony
Tony Phuah’s website
It’s good as long as not over-. • Moderation • balance


The most important insight I have learned so far in my life is balance.


The idea came from my study of the nature of change (dynamics). Dynamics is the outcome of positive feedback loops (reinforcing loops) and negative feedback loops’ (counteracting loops, or balancing loops) interaction. Sometimes reinforcing loop is the strongest, producing growth or drop behaviour. But the growth or drop would not continue forever. It would slow down, indicating that counteracting loop becomes dominant. When there is reinforcing loop, there is counteracting loop; when there is larger reinforcing loop, there is larger counteracting loop; when there is strong reinforcing behaviour, there will be stronger balancing behaviour. That seems to be nature of change.


This reminds me of the traditional Chinese philosophy. Traditional Chinese philosophy contained primitive ideas of dynamics(易), positive and negative forces’ interaction (陰陽), balance/moderation(中道、中庸), relationship between extremity and regime shift (物極必反).

Balance is not only about engineering control theory or Socio-Ecological system dynamics. Think about homeostasis in personal health.

It is not only Chinese who notice it, i.e. there is idiom called “Feast or Famine”(時飽時餓,不是太多就是太少,不是極好就是極差,好壞不定的).

From the perspective of society, neither feast nor famine is desired. We usually prefer no more, no less—just—enough, and keeps it forever.


Naturally, while counteracting loop will balance back diverging(偏離) condition of reinforcing loop, due to the inherent delays, the correction may produce big swing as illustrated in Figure (a), or even regime shift (environment changes permanently, old way not works anymore). This may not be desired.
Figure (a) and (b)
Ideally, we might like to find equilibrium level and stick with it. There are three issues with this ideal: First, it is very hard, if not impossible, to ascertain(確定) equilibrium level accurately; Second, when there is shock, environment changes, equilibrium level changes again; Third, and the most fatal, inherent delays (stocks) can only be reduced but not eliminated completely. Therefore, the best we can do is to minimise the amplitude of oscillation like in Figure (b), so that rise and fall will be in relative peaceful (smooth) way.

In other words, being moderate does not mean we must find the exact middle point(中間點). It would be more like balance the condition back when we detect current condition becomes extreme. There will always be fluctuations—no worry about boring.


This is an era loss of ideology. Communism? Gone. Capitalism? Failing… What else can we refer to?

The problem of ideology/faith is people. People have tendency to like to take a principle to extreme. “Drink water is good for health.” Okay, so to keep healthy, I drink water as much as I can, but then I get sick. Why? “Too much water, water intoxication!” My goodness!

If people must have one single principle to simplify thinking (reasoning), I would recommend moderation.

It is the safest principle, because even if it is taken to the extreme, moderationism is still “moderate in moderation”. Still moderate!

“It can also be recursive in that one should moderate how much they moderate (i.e. to not be too worried about moderating everything or not to try too hard in finding a middle [point]).” from Wikipedia.


And “Moderation is the silken string running through the pearl chain of all virtues”—unknown source.

In the zero-centered multi-dimensional space, moderation can be understood as moving around 0, not too positive (+ve) and not too negative (-ve).


Caveat:
There are many advices like “balance between A and B”, not every A and B is the balance/moderation of what I mean. Moderation is a general principle inducted (not deducted) from many cases of A and B but by no means exhaustive, some may only valid in their particular context while some are really universal and timeless. All inductions are wrong, but some are useful.

Also, moderation does not mean compromise, take middle ground between two opposite positions on fact (e.g. global warming). This is a logical fallacy (http://en.wikipedia.org/wiki/Argument_to_moderation).


Moderation is likely the principle for sustainability.

…although human brains are remarkably complex, the movement of crowds can be modeled with surprisingly simple rules.

Humans are clever, but this hardly makes us immune to fundamental principles of nature. Almost every line drawn in the sand between humans and non-humans-tool use, language, deliberate planning for the future, sense of self-has dissolved with further examination of the animal world, or the realization that basic mechanisms of interaction trump cognition. We are different, but not as different as we’d like to believe.


from this blog post.

Also,


Geller is correct that human cognition adds a complicating dimension in applying signaling theory to human behavior, but cognitive capacity does not nullify the predictions of signaling models. Evolutionary models (e.g., ESS models, optimal foraging theory, life history theory) offer predictions about phenotypic strategies that often ignore the underlying mechanisms, including cognition, physiology, and even genetics, that produce these strategies, as long as these proximate mechanisms do not significantly constrain optimal outcomes. These models allow us to determine the selective pressures that favor successful strategies. While human cognition may enable humans to devise uniquely sophisticated signaling strategies, there is no reason to believe that human signals are somehow outside the reach of selection pressures.

This lets me recall about the approximation of Newtonian physics’ model (but useful in daily life), and some economists’ argument to reject Limits to Growth’s model because there is no supply and demand modelled explicitly.

All policies make sense based on their underlying assumptions; otherwise no one would be tempted to formulate them or carry them out. Yet, they often have unforeseen consequences that lead to very different outcomes than the ones imagined. Worse, unlike the characters in folk tales who end up realizing their mistake, the unforeseen consequences of policies are typically diffuse and indirect, therefore difficult to trace to their causes. In this fashion, we become lost in a maze of unforeseen consequences.


from this blog post.

The value of System Dynamics is exactly to surface the underlying assumptions, thus minimizes the unforeseen consequences.

In computer programming, we often avoid introducing global variable because it is bug-prone and hard to trace. Local variable is the first choice.

In designing systems, to control the oscillation of the system, we try to introduce quick local [negative] feedback loops to avoid major [negative] feedback loop with delays to be triggered, which often bring unfavourable consequences.

I was amazed when I discovered the similarity of these two ideas today. Do they belong to some more general principle?

I feel that what we are arguing about is similar to how passengers of a slowing down, malfunctioning car argue about which way and what speed they should drive on, but when they look under the bonnet they find that they lost the engine.

Unfortunately today no political or financial leader dares to look under the bonnet, or even if they looked they do not dare to speak about what they found, because they only care about re-elections, or short term effects.

So they try to push the car with all their might and tricks but it cannot be restarted again.

We are continually arguing about how to resuscitate an economic model that has run its course and became dysfunctional for multiple reason, and all those reasons are reinforcing each other making any superficial adjustment impossible.

Both stimulus packages and austerity is based on the belief that we only need temporary adjustments until growth will restart again as if we were in a cyclical process. But this is not a crisis or depression but a system failure as some distinguished experts stated it before on this very forum.

All the bubbles based on the the unnecessary, vastly beyond necessity consumption fuelled by vastly over the capabilities credit, in a closed finite system where constant growth is impossible, producing mostly goods we simply do not need and which are mostly harmful are bursting now one after the other, the seams of our present social and political system (regardless of country or culture) which was created to serve the disproportional profit hoarding and distribution is coming apart.

There are no simple solutions, there is no overnight fix. Our present way of life is falling apart, what we need to concentrate on is how to shorten, and “sweeten” the transitional period, and what we build after.

In this respect austerity is better as at least by not running ahead blindly we are not causing even more problems, and deeper crisis according to the saying “if you do not know where you are going, it is better to sit and do nothing”.

Before we plan or move any further we have to study this global, integral and totally interdependent network we evolved into, and then build new social, political and economical strtuctures based on factual and objective knowledge which is mostly already available around us.

The new world will be based on necessities and available resources instead of false hopes and fabrications, and since we are all interconnected within the same system everything we do will be based on mutuality and true equality which in turn is based on the consideration and acknowledgment of everybody’s individual strengths and weaknesses.


from Zsolt comment in this commentary.

It is becoming clear that current level of social security is too high for some countries to sustain.
Besides increasing taxes for social security (as well as narrowing down rich-poor gap, strengthen society and democracy), social security level will need to be “de-leveraged” to society’s “debt/economic fundamental level” for some “over-leveraged” societies.
The question is how to do it?

People need time to adapt. And this is a new “social security contract”, people did not prepare for this new state beforehand. It would be not fair to carry out it drastically – prepare for political revolutions or even wars.
So what can we do?

My idea: “de-leverage” retirement pension scheme in gradually increasing manner based on age.
For example, assuming the society’s “debt/economic fundamental level” can support 40% of the original amount of retirement pension and the statutory retirement age is 60 years:
People aged 60 years or above will still get 100% of the original amount of retirement pension.
People aged 59 years (1 more year to retire) will get 98%.
People aged 58 years (1 more year to retire) will get 96%.

People aged 30 years (1 more year to retire) will get 40%.
People aged below 30 years can stick to 40% of the original amount or devise new “social security contract” based on society’s new vision of future.

What do you think? Any unintended consequence? Inputs welcomed.

When you have economic contraction you also have a substantial contraction of the trust horizon. This deprives political institutions at the national and international level of the trust that would give them political legitimacy. They become stranded assets from a trust perspective. People no longer internalize the rules that those institutions are attempting to impose. The response is typically surveillance, coercion, and repression. This picture basically suggests that it is pointless to look for solutions from the top down. It is not solutions that will come from the top down but more problems.

So politicians typically make a bad situation worse as expensively as possible.


from a quote of this article.


My idea:
How about promote a culture that president who failed to be re-elected will still be welcomed to contend in the presidental election in the future?
This should encourage those in top position make the “worse before better” tough decision. If his/her decision is wise, he/she will be more likely to get re-elected when the effects manifest.

Policy makers need to be allowed to try.

…debt can be used to finance four different financial transactions:
1. productive investment
2. innovation
3. consumption
4. speculation

The first two add to the productive capacity of an economy. When the government builds roads, dams that produce hydro-electric power, or other infrastructure projects, debt is being used productively. Similarly, when debt is used by companies for research and development or new ventures, it may lead to the production of new goods or services, which then can lead to an expansion of GDP.

Debt that is used for consumption, however, is considered a dissipation of capital. Nothing is produced; rather, something is consumed. After something is consumed—such as a basic necessity like food—the debt remains even though the item consumed no longer exists. When debt is added for consumption purposes it enables the debtor to pull tomorrow’s demand forward into the present. As debt is used to expand consumption in the present period, it is in essence borrowing from the future therefore reducing future demand.

Debt taken on for speculative purposes is also unproductive as it can lead to asset bubbles or overinflated prices for assets. Eventually all asset bubbles go bust. The overinflated asset values decline but the debt still remains. Think of the recent housing bust and the technology bubble as an example of speculative bubbles financed by debt for unproductive purposes.


from this article.

So, “Is debt good or bad?”

My response, “Debt for what?”

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