The Spiders Web
17/11/14: An analogy to help understand the economics of production
There is a great analogy that helps to understand society, and its economic systems of production.
The Web
Society is like a monolithic spiders web. The threads of the web are created by human bonds, relationships forged by trust, respect, justice and joint enterprise. Production is achieved through millions of spiders each walking tiny distances along its list segment of the web, carrying things to the next group of spiders and receiving things back in return.
The overall productive capacity depends on two factors: the web’s strength and extension; and the efficiency of engagement of the spiders. With regard to the web, the it is, the quicker the spiders can trudge backwards and forwards. The more extensive the web, the wider is the spiders’ reach. With regard to efficiency, the more spiders that are sensibly engaged, the more things can be carried around the web.
The vast web is built in the middle of an orchard of fruit trees. Spiders at the edge pick the fruit, along with branches, leaves and seeds. They specialise in this task to such an extent and so well, that they have the capacity and knowhow to pick more fruit than the entire population can eat. Part of their success is that another group of spiders has worked out how to build many specialised tools that the fruit pickers were able to use to reach their capacity. The tools are built with seeds, twigs and leaves used in bewilderingly varied and marvellous ways. The fruit pickers have to get the balance between picking materials for the tools and picking the fruit itself.
Resources
But there is more than one type of fruit. Some of the fruit is more popular than others, some is more nutritious. And the most of the spiders that prefer one or other of the fruit keeps changing their mind. There preferences change with the season, with how much of each fruit they have just been eating, with the type of fruit they see their friends eating and with the type of fruit they think is eaten by some of the other spiders they can not see. This makes it quite tricky to know which fruit to pick to optimise the pleasure of the spiders on the web. This itself presents a bit of a dilemma for the tool makers. The specialist tools for picking one fruit are quite different from the specialist tools required for another. Which tools should they make?
Each spider only has enough strength and web direction to carry its cargo of fruit and tool making materials only a tiny distance. The process requires a separate set of spiders to pick up the cargo and carry it another few steps towards its ultimate destination. The tool makers were not slow to recognise how much the web population could benefit by producing another set of specialised tools to help the spiders whose sole responsibility was picking up the deposited fruit and tool making material and delivering it along its next step. Depending on where the cargo was destined, there may be a series of different spiders, each carrying out specialist tasks to transport fruit in a way that minimised the amount of lost fruit. Some enterprising groups had worked out a deal with the tool makers to process some of the tool making materials along the way. It made its transportation easier, which meant the same number of spiders could carry more tools along the way, or less spiders were needed to carry any given quantity.
Everyone recognised that bringing the tool making materials to centralised places was in everyone’s interests. Without it, everyone would have been at the edge of the web, reaching for fruit for their own use as best as they could. They would have no tools, and none of the hugely efficient systems that allowed such large quantities of fruit to be collected. When looked at overall, it turned out that only around 1% of the fruit could be collected if all the spiders acted alone, compared with the fruit they had the capacity to collect when everyone on the web was working well together.
It did not need a genius to work out that everyone would be very much better off if the surplus fruit was shared evenly.
Practicalities
But there were some practical problems that the spiders had to resolve. And with limited brain capacity, they were stymied on a number of fronts.
Firstly, how were they going to allocate the riches to the individual spiders. One of the spiders who had managed to manoeuvre himself to the middle of the web came up with the idea of letting the spiders keep some of the fruit they were transporting, for themselves and their families. He called them workers, because they did the work of transportation. There were other spiders who sat by, doing nothing other than looking around and directing proceedings. They were not workers, they were talkers. They were panicked that they were not in a position to retain any of the fruit that they carried, because they were not carrying any fruit. But they did find themselves in another position that they found quite satisfying — power. Because they were directing procedings, they were able to tell the workers how much fruit they could retain. Even with spider brains, they managed to work out that the less they directed the workers to retain for themselves, the more that was available to them. They were able to rationalise this on the basis that the workers would be nothing without their direction, so they were entitled to more than their fair share. Of course, without the workers, they were able to pick even less than the workers were able to pick without them. But in having found themselves in a position of power, that argument did not suit their purposes and they were comfortable with the first.
The second problem was one of timing. Everyone wanted to eat now, but it would take time for fruit from the outside to find its way to the inside. Similarly, it would take time for the tooling materials to reach the place of production. The toolmakers had to guess which tools to make. The most effective forecasting they could achieve was based on past demand. So they asked for the quantity of tool making materials they thought they needed. This meant that the pickers reduced some of their fruit collections, reducing the fruit available for the general population. It would take a matter of just hours for some of the fruit and tools to reach its destinations at the outer edges of the web. But it could take many weeks for the cargo destined for the middle. Over the lifetime of a spider, this was the equivalent of between a couple of months and a couple of decades in human terms. As already mentioned, the spiders were prone to change their minds, of what they liked and how much they wanted to eat. There were times when the tool makers saw huge demand for fruit and increased their requests for materials for the tools. Because the fruit pickers had developed so much picking capacity, they saw the writings on the wall. Not only did they increase their tool production, but they also increased the quantity of fruit they picked. It was lucky they had so much capacity that they were able to pick more fruit than was needed at the time. But disaster struck on the day that the tool makers suddenly realised they ahd asked for too much. The tool-making materials were being stockpiled and sitting idly. They cut back on their orders whilst they were able to use their stockpile. The fruit pickers, who were still reading the wall writings, cut the quantity of fruit they were picking. This created the problem that the spiders who transported fruit suddenly had less fruit to transport. Because the directors had been directing them to take a percentage of the fruit they transported, suddenly a huge swathe of the spider population had less fruit to eat. A self-fulfilling prophecy has occurred. At their directors’ bidding, the fruit pickers had reduced the quantity of fruit they picked which slashed demand for fruit. So whilst the original cut in demand would have been limited to a relatively small quantity of fruit, it had now become a fully fledged recession.
Sharing the Fruits
Remember that the directors have been taking absolutely huge quantities of fruit. Some had taken as much as 10,000 items of fruit for every one item they allowed the worker spider to have. They had built up absolutely vast quantities of fruit, some of which was about to go off. But during the recession, the directors were quite secure with their fruit piles, because they knew they did not have to share their fruit. But the situation with the workers was very much more precarious. Because the quantity of food demanded had dried up, and because there was so much capacity now being unused, the directors needed fewer spiders to handle the reduced quantities of fruit now being picked. They could have paid back some of their fruit pile to the workers and kept everyone in work until the demand picked back up. But instead, they kept all their fruit, even the fruit that was destined to go off, and told a proportion of spiders they were no longer needed.
The spiders were kicked off the production web into a separate web that the spiders had build below the main web, for spiders who in the eyes of spiders directing the web were redundant to their needs. The directors and central spiders were content to drop off tiny quantities of fruit to each of the spiders in the safety net, but they did so really resentfully. The higher spiders wanted to keep to a minimum the amount of fruit they dropped down. They really did not want to give up their personal fruit piles if they did not have to. They used especially demeaning language about the people they had kicked down to the safety net, calling the scroungers. The remaining workers were continually fearful of being the next ones to be kicked off the web, and were eternally grateful that they were able to cling to the net.
The quantity of fruit picked by the web had dropped considerably. The job of the directors who were sitting rather than working was to come up with ways to keep the web working at full efficiency. But they had not managed to work out a system that used the spiders in the safety net. So the web was producing at well below capacity. Much of the potential gain was simply forgone. Proportionally to their wealth above subsistence, the spiders in the safety net had lost just about everything. The directors found that parts of their fruit pile were becoming rotten and had to be jettisoned, and they were able to skim off so much less than they had before. The overall production had reduced, so some (but not all) of the directors felt guilty about continuing to allocate themselves 10,000 pieces of fruit to every one of their workers. They reduced it to 9,000 or even 8,000 pieces from everyone, which means they had to slow down the piling up of the extra fruit.
One spider once asked one of the wealthiest spiders why they would want to continue to pile up the fruit. The pile was now so high it had already reached the heavens. Neither the spider, nor all the spider’s family nor every one of its friends would never in their lifetime being able to make use of the fruit. The wealthy spider talked about needing to use the pile to give to other worker spiders who helped the spider retain power. It knew that the entire basis of power through which it had built up its pile would act against it if it were even seen to have its power weakened. The asking spider was bemused at the reward structure of a system, devised by the spiders that sat and did not work, who argued that they were paid so handsomely for ensuring the web could continue to produce more fruit than it needed to eat, that left such huge quantities of picked fruit to go rotten and so many spiders to live in poverty or fear of poverty.
Measuring the Riches
The third problem, very linked to timing, was measurement. The spiders had never managed to devise a reliable system to measure which type of fruit was in fashion, and which was going to be in fashion once the tool makers had completed their tool making. The type of fruit desired constantly changed, and the quantity of each was very difficult to predict. The spiders were able to keep stockpiles of different types of fruit, but the fruit rotted and so could not sit there indefinitely. As some stage, one group of spiders were going to have to guess how much fruit would be desired in the future. If they guessed too little, the worker groups would flail around trying to work out how to increase production without the capacity to do so. The groups would entice spiders from other groups, without reference to the impact on the other group. Each group would have to offer the worker spiders more to transfer. The resultant inefficiency reduced even further the quantity of fruit picked, which exacerbated the shortages. Everyone would have to wait for the tooling capacity to increase. And at that point, the next round of forecasting of demand would have to increase since spiders are very good at learning from their mistakes. Similarly, if they guessed too much, the whole production process would crash, with the first sign of reduced demand being amplified to a recession. In fact, spiders had a very simple capacity to learn from their mistakes. They were limited to the most recent round of guesses. It was almost inevitable that a boom would turn into a recession, because there would come a time when a prior under-guess would no longer be a valid forecast of the next round of demand. The directors would increase their demands by even more, at a time when demand was about to slow. They did not have the tools to judge demand reliably enough, and they had structured their economy in a way that it was not able to cope with reallocating the worker spiders in a way that would recharge demand at the right places and at the right time. In fact, if truth be told, the directors who were being paid so handsomely for directing the economy so efficiently, were not even able to judge whether the economy was running efficiently in the first place. They only looked at whether they were producing more fruit than they had the week (a year in human terms) before. No compensation was made for the fact that so much of the surplus fruit ended up in fruit piles to be enjoyed by spiders who would never live long enough to enjoy the majority of the fruit, or for the numbers of spiders who lived in squalor and poverty.
The Nature of the Web
The visible aspect of production is complicated enough. But so far, no mention has been made of the web itself. This is the foundation on which the whole economy is built. Without the web, there is no capacity for spiders to work together. The web needs to be built with strength and efficiency. Wherever a web has broken strands, spiders in that area can not crawl effectively to carry their cargo. The weaker and fewer the strands are at any part of the web, the smaller the cargo the spiders in that area can carry. Where the web is strong and well built, it also allows the web to be expanded at that area. The web can become more extensive, and the specialist spiders can become even more specialist and in even more areas of speciality. Where the web is weak, there is no foundation on which to lay a new outer layer of the web. But to spiders, a web has one more key feature. It is made of silk. This is the human equivalent of a bed of feathers. A well-built web gives spiders untold pleasure, just by being there. If a web is poorly built, it is like humans lying on a bed of nails, or even lying outside in the freezing cold in the midst of winter.
In the human equivalent of this analogy, the silken web is spun of truth, trust, justice and respect. Embedded in respect is the complete acceptance of one spider to live exactly how it chooses to provide only that the other spider does not substantially harm the interests of the first spider in doing so. Embedded in trust and justice is the integrity of one spider to fulfil the unwritten contract of every spider that the gains of a joint approach to the fruit picking will be shared fairly. Embedded in truth is the obligation on one spider to avoid gaining power by fanning the fury of one larger group of spiders, enticing it to harm a smaller group, through dishonest or imbalanced incitement.
The relationships that are forged in and through the spinning of the web directly influence the quality of a spider’s life. It needs to love and be loved, to be needed, to feel a useful part of the web, to feel secure both personally and physically. It needs to be appreciated and given a fair reward for its efforts. If the strength, quality, efficiency of layout and extensiveness of the web can provide for these needs, it maximises the chances of achieving the maximum return for all the spiders who live on the web, whose attitudes, values and behaviours make it on it and who depend on it.
Measuring Success
It is difficult to measure how well a web is spun. A start point is to use indicative measures for the strength of its foundations: proxies for integrity such as corruption; proxies for truth such as propensities to lie in different circumstances; and proxies for trust such as confidence in institutions like banks and local government, and in individuals in position of trust like politicians and journalists.
But before any judgement can be made on the effectiveness of socity, we must determine its objectives. Is the objective of society as simple as the objective of the directors of power? Is it to maximise the quantity of fruit picked in any one week, or perhaps over an entire boom and bust cycle? Or is it to maximise the aggregate quality of life of the spiders on the web (or their aggregate level of satisfaction, and/or fulfilment, and/or happiness, and/or peace) over any given period?
In today's democracies, we evaluate society through the prism of an imposition-based society. In an imposition-based society, incentives are given at times to encourage certain types of behaviour. At other times, behaviour is coerced. It is the carrot and sticks approach. Humans model their behaviour on the environment they live in, not how they are told to live. The approach that is modelled is that of a carrot and stick. At all levels of society, people seek to impose their will on the will of others. This is the environment in which they live. Carrots and sticks influence individual actions, but not attitudes or values. It is demeaning and humiliating. It saps self-respect and self-confidence. It weakens trust and creates discord. People feel insecure.
In values-based societies, the directors of power act by reference to universal human values. The population models its behaviour accordingly. In a values-based society, it is unlikely that so many spiders will have such disregard to the similar efforts of other spiders who play an equal part in the life of the web as to choose to reward themselves with 10,000 pieces of fruit to every one of its workers. The smoother, stronger web is more conducive to an efficient society, with its focus on socially fulfilling structures and equitably-rewarded productive structures. It allows the space to develop overall efficiencies, on finding an appropriate use for workers, and it closes doors to use of resources that best serve the personal interests of the centralised and distributed directors of power.
