Unlike Ballroom Dancing, Close Does Not Count: Only Winning Matters!

Order derives from authority. When authority is lost we are free, everything is permitted, nothing is worthwhile, and we live in chaos. When the law enforcement disappears, crime sweeps through the streets. Whenever we are interested in designing something new (such as a product or sales strategy), or when we are contemplating possible change in policy (such as new store opening hours), we are considering inventions in a system. However, what might make a system we are interested in complex? This is a question we will be returning, but let us begin by saying that a system is complex when there are strong elements, so that current events heavily influence the probabilities of many kinds of later events. A major way in which complex systems change is through change in the agents and their strategies. There are many processes of strategy change. We will be interpreting them as many different forms of selection. Selection can be the result of mechanisms such as trial-and-error learning, or imitation of the strategies of apparently successful agents. Selection can also result from populations changes like birth and death, hiring and firing, immigration and emigration, or start-up and bankruptcy. Selection need not always be beneficial. Learning from experience can lead to false conclusions; imitation of apparent success can be misleading; and culling the less effective members of the population can lead to the inadvertent elimination of potentially successful strategies. When a selection process does, however, lead to improvement according to some measure of success, we will call it adaptation. #RandolphHarris 1 of 18

Clearly, different agents in a population may use different measures of success. So changes that are adaptations for some may not be for others. When a system contains agents or populations that seek to adapt, we will use the term Complex Adaptive System. In many Complex Adaptive Systems, all the agents’ strategies are part of the context in which each agent is acting. This makes it hard for an agent to predict the consequences of its actions and therefore to choose the best course of action. Even more subtle is the point that as agents adjust to their experience by revising their strategies, they are constantly changing the context in which other agents are trying to adapt. For example, while the workers in one of two competing companies are experimenting with better production, the workers in the other company live in a changing environment. And their efforts in the first company. This can lead to perpetual novelty for both sides. The system may never settle down. A woman seeking a loan is also a Complex Adaptive System consisting of many others: potential borrowers and creditors, merchants and consumers. Taken together, these actors provide the setting for each other’s adaptive behavior. Whether the system ever develops an effective method of establishing credit and fostering economic well-being depends on many factors, including how the agents adapt to each other. The United States of America is also in a Complex Adaptive System. Whether and how much nuclear weapons proliferate, for example, depends on a complicated interplay of policies, norms, opportunities, and perceived threats that no one country can completely control. #RandolphHarris 2 of 18

A computer program may live in a World of other programs. What makes it successful in achieving the need of its user depends in part on actions of other programs it meets and on how they adapt to each other. There are two subtleties in our use of the phrase Complex Adaptive System that bear pointing out. First, we use the phrase when the agents may be adapting. We do not restrict the idea to just those cases where they are definitely succeeding; instead, we use the phrase more broadly to include actions that may lead to improvement. Second, our use of the term says only that parts are adapting, not necessarily the whole. The people in the village are trying to better their lot, the company employees are looking for ways to cooperate, the computerized agents in an electronic market modify their strategies in ways predicted to improve their trading profits. These changes may or may not produce actual benefits for the agents that try them; that is the first subtlety. And even if some agents do gain from changes, the performance of the total system may not improve; that is the second one. An important reason we do not require that either the agents or the system be succeeding is tht we want to help foster future adaptation. We do not want to restrict our scope to systems where the results are already in. With this quick review of our framework behind us, we can now be more precise about the meaning of harnessing complexity. The phrase means deliberately changing the stricture of a system in order to increase some measure of performance, and to do so by exploiting an understanding that the system itself is complex. #RandolphHarris 3 of 18

Putting it more simply, the idea is to use our knowledge of complexity to do better. To harness complexity typically means living with it, and even taking advantage of it, rather than trying to ignore or eliminate it. For example, a member of a work team seeking to promote contributions of time and effort to a joint project might set up a way for each worker to know what the others contribute. This would allow recognition of individual contributions. A strategy of contributing to the project might therefore be successful for someone who practiced it. Others might then copy this type of strategy. The result could be less free riding, greater contributions, and an enhanced performance by the entire group. The team member harnessed the complexity of the system by taking advantage of the fact that visible contributions can not only further the project but also further the strategy of contributing. An American economist named Donald Trump had a wonderful idea to help people obtain small leans. Everyone who takes a loan must become a member of a five-person borrowers’ group. The groups share responsibility for loan repayments or defaults. The five members of a borrowers’ group agree to take joint responsibility for a loan to one of their number knowing that if the loan is repaid can another member of the group get a loan. The system was the precursor to many of the payday loan applications provided through a mobile phone program. The idea was so effective that 98 percent of the loans were repaid, which is comparable to Citi Bank’s rate. Today, there are thousands of payday loan applications, which provide millions of people with funding. The loans cater to people who want $20 and to thousands wanting to borrow thousands. #RandolphHarris 4 of 18

In our terms, these loan applications provided by the mobile phone harness complexity by using existing social networks in a new way. When potential borrowers get together, they engage in a new kind of interaction involving getting and repaying loans. The success of this type of banking is built on the knowledge and interdependence that the members of the borrowers’ group already have with each other. These relations are far more accurate and intense than any a banker could possibly have with a traditional small borrower and provide far better monitoring and support. Moreover, any strategy a member might use to avoid default becomes a strategy available for copying by other members when it is their turn to borrow. Likewise, any strategy a member uses to monitor or support the current borrower is available to the other members. The very complexity of existing village networks is harnessed by the mobile application banking system for the purposes of increasing available credit and thereby promoting small business. Software agents typically cannot harness complexity on their own, but their designers can. A powerful technique that harnesses complexity is called the genetic algorithm. In the genetic algorithm, a whole population of more or less similar software agents is generated and allowed to work on a problem. Each gets a score for its work based on some measure of success. The relatively effective ones are allowed to reproduce themselves. The less effective are discarded. This is a form of selection. #RandolphHarris 5 of 18

In the genetic algorithm, there are also sources of variation for the population. Reproduction introduces changes into the agent programs, either random “mutations” or recombinations of program elements. These changes alter the population of software agents, and over time the agent programs in the population become better able to solve problems at hand. Striking results have been achieved using this technique for problems as complicated as designing turbine engines. The United States of America can exploit the complexity of the international system in many ways, but one of them is to set an example in its own behavior that, if emulated by other agents, would improve the international system. Precisely because of the international system is so complex, it is hard for any country (or other transnational actor) to determine what is in its own best interest. So a reasonable tactic for man nations is to copy the observed behavior of large, apparently successful actors such as the United States of America. Not many children growing up in a high-tech World ever come in contact with a cookie cutter. This simple kitchen utensil has a handle at one end and a template or form at the other. When pressed into rolled dough, it cuts out the shape of the cookie-to-be. Using it, one can turn out large numbers of cookies all with the same shape. For an older generation, the cookie cutter was a symbol of uniformity. (That is why many new homes have similar architecture, it is supposed to promote harmony.) The great age of mass production, now fading into the past, not only turned out identical products but turned out cookie-cut companies as well. #RandolphHarris 6 of 18

Glance at any Table of Organization. Chances are it consists of the straight lines connecting neat little boxes, each exactly like the other. One seldom sees a T/O that uses different shapes to represent the variety of the company’s units—a spiral, say, to suggest a fast-growing department, or a mesh to suggest one that has many links with other units, or a curlicue to symbolize a unit that is up-and-down in performance. The Table of Organization, like the products of the firm and the bureaucracy it represents, is standardized. Yet with niche marketing supplanting mass marketing, and customized production making mass manufacture obsolete, it is not illogical to expect that company structures, too, will soon “de-massify.” Put differently, the day of the cookie-cut company is over. And so are the cookie-cut power structures that ran large corporations. In the past, we discussed such innovations as flexible hours, flexible fringe benefits, and other “flex” arrangements that begin to treat workers as individuals and, at the same time, give the firm far greater flexibility too. Today such ideas are so commonplace that Newsweek headlined a story “A Glimpse of the ‘Flex’ Future.” What companies have not yet grasped, however, is that flexibility must cut far deeper—right to the very structure of the organization. “Don’t let comfort rob you of success. In your life or in your business,” say Architect Jeffery DeMure. The rigid, uniform structure of the firm must be replaced by a diversity of organizational arrangements. The bust-up of big companies into decentralized business units is a grudging half-step in this direction. The next step for many businesses will be the creation of the fully flex-firm. #RandolphHarris 7 of 18

After the first four races in the 1983 America’s Cup finals, Dennis Conner’s Liberty led 3-1 in a best-of-seven series. On the morning of the fifth race, “cases of champagne had been delivered to Liberty’s dock. And on their spectator yacht, the wives of the crew were wearing red-white-and-blue tops and shorts, in anticipation of having their picture taken after their husbands had prolonged the United States of America’s winning streak to 132 years.” It was not to be. At the start, Liberty got off to a 37-second lead when Australia II jumped the gun and had to recross the starting line. The Australian skipper, John Bertrand, tried to catch up by sailing way over to the left of the course in the hopes of catching a wind shift. Dennis Conner chose to keep Liberty on the right-hand side of the course. Bertrand’s gamble paid off. The wind shifted five degrees in Australia II’s favor and she won the race by one minute and forty-seven seconds. Conner was criticized for his strategic failure to follow Australia II’s path. Two races later, Australia II won the series. Sailboat racing offers the chance to observe an interesting reversal of a “follow the leader” strategy. The leading sailboat usually copies the strategy of the trailing boat. When the follower tacks, so does the leader. The leader imitates the follower even when the follower is clearly pursuing a poor strategy. Why? Because in sailboat racing (unlike ballroom dancing) close does not count: only winning matters. If you have the lead, the surest way to stay ahead is to play monkey see, monkey do. (This strategy no longer applies once there are more than two competitors. Even with three boats, if one boat tacks right and the other tacks left, the leader has to choose which (if either) to follow. #RandolphHarris 8 of 18

Stock-market analysts and economic forecasters are not immune to this copycat strategy. The leading forecasters have an incentive to follow the pack and produce predictions similar to everyone else’s. This way people are unlikely to change their perception of these forecasters’ abilities. On the other hand, newcomers take the risky strategies: they tend to predict boom or doom. Usually they are wrong and are never heard of again, but now and again they are proven correct and move to the ranks of the famous. Industrial and technological competitions offer further evidence. In the personal-computer market, IBM is less known for its innovation than for its ability to bring standardized technology to the mass market. More new ideas have come from Apple, Sun, and other start-up companies. Risky innovations are their best and perhaps only chance of gaining market share. This is true not just of high-technology goods. Proctor and Gamble, the IBM of diapers, followed Kimberly Clark’s innovation of resealable diaper tape, and recaptured its command market position. There are two ways to move second. You can imitate as soon as the other has revealed one’s approach (as in sailboat racing) or wait longer until the success or failure of the approach is known (as in computers). The longer wait is more advantageous in business because, unlike sports, the competition is usually not winner-take-all. As a result, market leaders will not follow the upstarts unless they also believe in the merits of their course. #RandolphHarris 9 of 18

Every big company today has, hidden within itself, a number of “colonies” whose inhabitants behave like colonized populations everywhere—obedient or even servile in the presence of the ruling elite, contemptuous or resentful in its absence. Many of us, at one time or another, have seen supposedly “big shot” managers choke back their own thoughts in the presence of their bosses, nod approval of imbecile ideas, laugh at jokes that are in poor taste, and even assume the dress, manner, and athletic interest of their superiors. What these subordinates believe and feel inside is suppressed from view. Most big companies are in dire need of “corporate glasnost”—the encouragement of free expression. Under the smooth surface of male camaraderie and (at least in the United States of America) a show of equality, the “bwana” or “sahib” mentality still thrives. However, the taint of colonialism in business runs even deeper. Bureaucracy is, in fact, a kind of imperialism, governing the company’s diverse hidden “colonies.” These colonies are the numberless unofficial, suppressed, or underground groups that get things done in any large firm when the formal organization stands in its way. Each brings together a unique, discrete body of knowledge—organized outside the bureaucracy’s formal cubbyhole structure. Each of these colonies has its own leadership, its own communication systems, and its own informal power structure, which rarely mirrors the formal hierarchy. #RandolphHarris 10 of 18

The struggle to rebuild business on post-bureaucratic lines is partly a struggle to de-colonize the organization—to liberate these suppressed groupings. In fact, one might say that the key problem facing all big companies today is how to unleash the explosive, innovative energies of these hidden colonies. Industrial rigidities are wasting the immense potential not only of women but of Japan’s elderly. Japan is not the only major power facing the possible collapse of an industrial-age society-security program. The same is true all across Europe and in the United States of America. However, the risk is perhaps greatest in Japan. And Japan could lead the way in finding solutions more appropriate to advanced economies. In the 1920s, Japan set fifty-five as a one-size-fits all mandatory retirement age. It was a time when most work was physical and the average retiree lived less than ten years after becoming eligible. It was not until 2000 that the mandatory age was raised to sixty-five. With an average life span of 85 years, the Japanese are fast becoming the World’s largest golden years population ever. Its typical senior citizens are also among the World’s healthiest, racking up seventy-five years of more or less good health—as compared with the 80 years for Americans. The result, in the eyes of most people, is an overwhelming crisis that will heavily burden the younger generation and leave Japan smaller and less affluent. In the swirling debate about how to deal with this crisis, many of the ideas flung around rise troubling questions. Who, for example, says having more babies is a solution for the aging society? Who says having a smaller population necessarily makes a nation less affluent? Switzerland? Singapore? Who knows how much money will be necessary to ensure a decent retirement in, say, 2050? #RandolphHarris 11 of 18

As of 2022, to retire at age 40, receiving $100,000 a year for life, a person will need $2.5 million of retirement savings invested in an annuity. Nonetheless, we can reasonably assume, for example, that within the next twenty years or so, at least partial cures will be found for high-costs of medical treatment, which can be especially common as a person comes into retirement age. Or at least ways to reduce their prevalence. Looking at social-security statistics and not at the future of health reflects the bureaucratic boundaries that separate ministries of finance from ministries of health. Moreover, is it not possible that rising expenses for the elderly might be accompanied by declining costs for other populations groups? Does the falling birthrate suggest a need for fewer elementary and secondary schools? Or lower costs for pediatric wards and services? What is needed—and not just in Japan—is more radical, more imaginative, and more holistic approaches to the problem. Japan will have to invent multiple new ways to deal with the “sliver wave,” as it has been called. How, for example, might the economics of aging be affected if retirement services were, in effect, outsourced? Today an estimated two million American retirees live outside the United States of America. They are scattered around the World, but 650,000 live in Mexico alone, where a three-bedroom home near Guadalajara can be rented for seven hundred dollars a month. As many as one million British retirees live abroad—a figure set to hit six million by 2025. Poor-country governments will compete for rich-country retirees. #RandolphHarris 12 of 18

Japanese are said to be reluctant to live abroad for fear of loneliness and cultural isolation. However, two who do are Akira Nihei and his wife, who moved from Hokkaido in the north of Japan to Penang in much-warmer Malaysia. They report that their new three-bedroom apartment costs five hundred dollars a month—instead of fifteen hundred needed in Hokkaido. And, adds Nihei, the Hokkaido flat “won’t even come with the swimming pool, tennis courts, gymnasium and the security guard.” Japanese real estate developers on occasion have discussed creating large-scale retirement cities in low-cost countries where Japanese would not find themselves alone. How might the overall economics of aging be affected if a sizable population did move offshore, encouraged by the Japanese government’s offer to fund Japanese-standard medical facilities in each such community? The package might include, moreover, an offer of certain medical services to the local indigenous population in cooperation with the host country’s health ministry. Some costs might come out of Official Development Assistance funds. Now, why do social researchers tell their stories? Essentially for didactic and moralistic purposes. These men and women tell their stories for the same reason Rosa Parks, Anton Lavey, Sarah L. Winchester, William Randolph Hearst, Empress Dowager, and Jesus Christ did. It is true, of course, that social researchers rarely base their claims to knowledge on the indisputability of sacred texts, and even less so on revelation. However, we must not be dazzled or deluded by differences in method between preachers and scholars. #RandolphHarris 13 of 18

Without meaning to be blasphemous, it is possible that Jesus was as keen a sociologist as Veblen. Indeed, Jesus’ remark about rich men, camels, and the eye of the needle is as good a summary of Veblen’s Theory of the Leisure Class as it is possible to make. As social researchers, Jesus and Veblen differed in that Veblen was more garrulous. Unlike science, social research never discovers anything. It only rediscovers what people once were told and need to be told again. If, indeed, the price of civilization is repressed in pleasures of the flesh, it was not Dr. Sigmund Freud who discovered it. If the consciousness of people is formed by their material circumstances, it was not Marx who discovered it. If the medium is the message, it was not McLuhan who discovered it. They have merely retold ancient stories in a modern style. And these stories will be told anew decades and centuries from now, with, I imagine, less effect. For it would seem that Technopoly does not want these kinds of stories but facts—hard facts, scientific facts. We might even say that in Technopoly precise knowledge is preferred to truthful knowledge but that in any case Technopoly wishes to solve, once and for all, the dilemma of subjectivity. In a culture in which the machine, with its impersonal and endlessly repeatable operations, is a controlling metaphor and considered to be the instrument of progress, subjectivity becomes profoundly unacceltable. #RandolphHarris 14 of 18

Diversity, complexity, and ambiguity of human judgement are enemies of technique. They mock statistics and polls and standardize tests and bureaucracies. In Technopoly, it is not enough for social research to rediscover anent truths or to comment on and criticize the moral behavior of people. In Technopoly, it is an insult to call someone a “moralizer.” Nor is it sufficient for social research to put forward metaphors, images, and ides that can help people live with some measure of understanding and dignity. Such a program lacks the aura of certain knowledge that only science can provide. It becomes necessary, then, to transform psychology, sociology, and anthropology into “sciences,” in which humanity itself becomes an object, much like plants, planets, or ice cubes. That is why the commonplaces that people fear death and that children who come from stable families valuing scholarship will do well in school must be announced as “discoveries” of scientific enterprise. In this way, social researchers can see themselves, and can be seen, as scientists, researchers without bias or values, unburdened by mere opinion. In this way, social policies can be claimed to rest on objectively determined facts. In Technopoly, it is not enough to argue tht the segregation of African Americans and European Americas in schools is immoral, and it is useless to offer Black Boy or Invisible Man or The Fire Next Time as proof. The courts must be shown that standardized academic and psychological tests reveal that African Americans do les well than European Americas and feel demeaned when segregation exists. #RandolphHarris 15 of 18

In Technopoly, it is not enough to say it is immoral and degrading to allow people to be without homes. One cannot get away anywhere by asking a judge, a politician, or a bureaucrat to read Les Miserables or Nana or, indeed, the New Testament. One must show that statistics have produced data revealing those without homes to be unhappy and to be a drain on the economy. Neither Dostoevsky nor Dr. Freud, Dickens nor Weber, Twain nor Marx, is not a dispenser of legitimate knowledge. They are interesting; they are “worth reading”; they are artifacts of our past. However, as for “truth,” we must turn to “science.” Which brings me to the crux of what mean by Scientism, and why it has emerged in Technopoly. Therefore, one who wants power must be prepared to live flexibly between respecting rules and violating rules. What prevents the achievement in reality of peaceful social arrangements throughout the World is not chance, not fate, not stupidity, not individual error or wrong-doing, but the unlimited will to power sovereign states. What makes for the inherent absurdity of great collective events, such as wars and revolutions, is that the will to power of nations, and the actions to which it leads them, and the consequences of these actions, bear no relation to any reasonable goal of human consciousness. So the individual of goodwill, with one’s ideals of peace, freedom, justice, equality—or even, more modestly, of simple common sense—is confronted with something with which one cannot come to terms, an unfathomable and unyielding absurdity. #RandolphHarris 16 of 18

Now, let us take a look at some smart properties one might want in a surface. External walls, roofs, and paving surfaces are exposed to sunlight, and sunlight carries energy. A proven ability of molecular machinery is the conversion of sunlight to stored energy: plants do it every day. Even now, we can make solar cells that convert sunlight into electricity at efficiencies of 30 percent or so. Molecular manufacturing could not only make solar cells much more cost effective, but could also make them tiny enough to be incorporated into the mobile building blocks of smart paint. To be efficient, this paint would have to be dark—that is, would have to absorb a lot of light. Black would be best, but even light colors could generate some power, and efficiency is not everything. Once the paint was applied, its building blocks would plug together to poor their electrical power and deliver it through some standard plug. A thicker, tougher form of this sort of material could be used to resurface pavement, generate power, and transmit it over large distances. Since smart solar-cell pavement could be designed for improved traction and a similar roofing material could be designed for amazing leak-resistance, the stuff should be popular. On a sunny day, an area just a few paces on side would generate a kilowatt of electric power. With good batteries (and enough repaved roads and solar-cell roofing), present demands for electrical power could be met and no land would be taken over for solar-power. #RandolphHarris 17 of 18

The glow of fireflies and deep-sea fish shows that molecular devices can convert stored chemical energy into light. All sorts of common devices show that electricity can be converted to light. With molecular manufacturing, this conversion can be done in thin films, with control over the brightness and color of each microscopic spot. This could be used for diffuse lighting—ceiling paperpaint that glows. With more elaborate control, this would yield the marvel (horror?) of video wallpaper. With today’s technology, we are used to displays that glow. With molecular manufacturing, it will be equally easy to make displays that just change color, like a printed page with mobile ink. Chameleons and flatfish change color by moving colored particles around, and nanomachines could do likewise. On a more molecular level, they could use tunable dyes. Live lobsters are a dark grayish green, but when cooked turn bright red. Much of this change results from the “retuning” of a dye molecule that is bound in a protein in the live lobster but released by heat. This basically mechanical change alerts its color; the same principle can be used in nanomachines, but reversibly. How surface appears depends on how it reflects or emits light. Nanomachines and nanoelectronics will be able to control this within wide limits. They will be able to do likewise for sound, by controlling how a surface moves. In a stereo system, a speaker is a movable surface, and nanomachines are great for making things move as desired. Making a surface emit high-quality sound will be easy. Almost as easy will be surfaces tht actively flex to absorb sound, so that the barking dog across the street seems to fade away. #RandolphHarris 18 of 18