THE ITHACA PAPERS

DEREK DILLON'S UNPUBLISHED ARTICLES



Econophysics: Reflections 35 Years Later©

Me and Ben Ray and Muckle were fortunate during my sophomore and junior years at a tiny (150 guys, 250 girls) remote military high school in Alaska to receive special tutorials from Dr. Moore in symbolic logic, topology, and foundations. We found the three texts in the base library and photocopied them. During my senior year in Ohio, I took honors PSSC physics simultaneously with an experimental course in economics. This was 1963 and the beginning of my engagement with what is now called “econophysics”. That year, in grappling with models of “multiple bank credit expansion”, I visualized the “functions” of exchange mapped on a complex topological surface as logic-lattices. Little was done with the idea then, but it was firmly imprinted in my awareness.

The following two years, sitting in Dr. Elspeth Rostowís seminars on American intellectual history listening to accounts of the role Newtonís physics played in organizing the spectrum of 17th and 18th century political economy, I fully recognized the unstated corollary that the advent of relativity and quantum physics had utterly sundered the assumptions underlying market capitalism, all of which are rooted in views prevalent during that period two- to three-hundred years ago. What happens when the dominant economy is running on intellectual empty? is a question first entertained by me at that time. Just barely touching my awareness, like a ghost image hovering behind the fair doctorís words, was an implication relative to logic-lattice maps: the behavior equations of econometrics are all drawn in Cartesian x,y,z-coordinates; as long as that situation prevails, there can be no new post-Newtonian notions of the functions of exchange. I was aware that statistical mechanics was regarded as post-Newtonian. I was aware that stochastic economics was regarded as post-Newtonian. I, however, regarded both as deteriorated-Newtonian, not as actually post-Newtonian: extreme chromaticism or atonality, as opposed to the dodecaphonic.

A lot of my attention at the time was focused towards the Hamilton-Jefferson debates on the national debt. I saw Jeffersonís point of view as either a pre-Newtonian throwback or an uncanny precognitive apprehension of what much later would emerge as fundamental flaws in the Newtonian institutionalization. Hamiltonís triumph over Jefferson set course for the new American nation-state and it has not looked back since -- likely never will. My interest, at this juncture, in problems of “development” crystallized because the basic issues underlying the Hamilton-Jefferson debate -- industrial leviathan versus agrarian contemplative -- were being replayed in the cultural dynamics of “emerging nations”. It seemed that this was the venue most likely to produce something relevant to the “running on intellectual empty” question.

The first misadventure in this realm came during my initial two undergraduate years through involvement with AIESEC, an international business student exchange program set up under the Marshall Plan. I helped a fellow student at American Universityís School of International Service brainstorm a program in American civil service traineeships for “Third World” business students, which was to be administered under the auspices of the Treasury Department and funded by a private foundation. With the necessary letters of introduction provided us by Senator Humphrey, following our presentation in his office, Secretary Douglas Dillon personally approved the proposal. Details of AIESECís prospective involvement were formalized at an AIESEC National Committee meeting held two months later at the Wharton School of Finance in Philadelphia. I subsequently located a foundation which agreed to make the required seed grant. The idea behind this program was eventually to network an international framework for brokering small business opportunities with appropriate small business investors, utilizing selected individuals who soon would be well placed in host countries to facilitate such brokering activities -- a small commission being charged for the service. All for naught, however. About the same time (for ideological reasons related to the idea that the purely-business AIESEC should not be sullied with government involvement) a conservative Senator stepped in and blocked this program from actually being established, I became aware of the degree to which AIESEC was being used as cover for intelligence operations and to infiltrate student groups abroad. This made crystal clear recognition that potential Jeffersonian initiatives directed to “running on intellectual empty” were actively being nipped in the bud. The experience thus gained was one consideration in my decision to quit college and volunteer for Special Forces. I figured that if I was to realistically undertake anything significant related to “intellectual empty”, I needed to learn something about the real world while still young enough to profit by the experience.

Several years later, in Viet Nam, I was fortunate to contribute to in-depth analysis of transformational dynamics of a political framework exhibiting some properties of a self-organizing process: the Viet Cong Political Infrastructure (VCI). It was not the communist aspects of this framework which were interesting from the perspective of self-organization, but its animistic properties. During the period of my participation in this analysis, the highest ranking rallier of the war, Lt. Col. Tran Van Dac, was intensively de-briefed by Strategic Research and Analysis, MACV-J2, concerning details of these unique transformational dynamics. Soon after leaving Viet Nam and the U.S. Army, I returned in late 1968 to Washington, D.C., and attempted to find funding for a book project based in large part -- picking up where I had left off -- on year-long interviews which were to be conducted with Col. Dac. I went with the project proposal to Dr. George Harris, whom I had studied anthropology under, and he sent me to Human Sciences Research, Inc., a just-inside-the-beltway think-tank. After talking with me for several hours about the transformational properties of the VCI relative to then prevailing ideas about self-organization -- ideas advanced by people like Dr. Heinz von Foerster, Professors Yovitz and Cameron, and the like -- they were very interested in the Tran Van Dac project; one could even say, quite excited. The process of making application for a Department of Defense grant was begun. Human Sciences, however, did not wish to wait for the whole grant proposal process to run its course; they proposed I go back to Saigon as a rider on an already established project while the proposal went through the mills. The idea was to take Col. Dac to the Philippines where he would be safe during the long interview process. I was to work on arranging that with the GVN until the DOD grant was approved. Agreeing, I began to make preparations. The whole thing was abruptly called off, however, when a national news magazine published a report that Col. Dac was going to be in residence at the Paris Peace Talks, and because, so I was informed, the leader of the existing Human Sciences project refused to accept a rider. When I later discovered that the report in the news magazine was false, it occurred to me that I had learned another lesson in the realpolitik of applications in political and/or economic self-organization.

Next came a systematic search for some university that would allow me to finish undergraduate studies with a dual major: physics and public administration. I was intent on pursuing the implications of what I had learned into much more detailed analysis. I did not wish to postpone this effort until after a B.S. degree, an M.S., a Ph.D., post-doc studies, and early teaching, until, that is, a situation could be arranged within which I would be permitted to undertake non-sanctioned studies. My inquiries made very clear that (at that time, at least) not only would such a dual undergraduate major be impossible, but the sort of projects I had in mind would be wholly unacceptable at the graduate level as well. Frankly, everyone I talked with scoffed at the idea there was any significant connection between physics and political economy. This was especially the case at the mention of quantum physics. So, I decided: The heck with it; Iíll just have to do my best to study these things on my own.

Approximately two years had passed. Most of the half-dozen analysts who had done ground- breaking studies at Strategic Research and Analysis in Saigon were now out of the Army: 1971. An attempt was made to take the experience and knowledge gained in Saigon and put it together with the old AIESEC idea for brokering small business international joint ventures. I tried to bring together the Saigon group into a consultancy firm specializing in application of principles of self-organization to small business ventures and management trouble-shooting. My fatherís post-pilot second Air Force career as a supply and matériel trouble-shooter was something of a personal precedent. Since this idea had already been well jaw-boned in Saigon during 1968, there was interest, particularly so by the lawyer in the group who had gone to Harvard Law School and studied national security policy under Kissinger before arriving in Saigon. A University of Washington planner and a fellow who had studied PPE at London School of Economics were also among the group and involved in the discussions. But it was not possible to bring these people to any committed consensus for action. Post-Vietnam syndrome and disillusionment over the sort of things Sam Adams later drew attention to during the Westmoreland-CBS trial prevented effective focus on the large issues involved. Eventually, the idea of a consultancy was set aside.

Just as well, I suppose, as surely it would have been another misadventure. Even then, I was to a certain extent aware of the reasons why. Spontaneous social order cannot transpire absent the requisite psychological, social, and cultural supports. It is impossible to create an authentically self-organizing vehicle within, say, a company that is set in a society which intensively suppresses all the psychological, social, and cultural concomitants of spontaneous social order. How, for instance, do you overcome the coercive programming brought into the workplace by adversarial medicine? When lawyers, insurance adjusters, and a secularized priesthood trained by memorization of remedial medical scriptures are major patriarchal threat components of the employee management system, how could self-organization possibly transpire? Can this be done when the propositions of a mere philosophical perspective -- the prevailing “medical model” detailing, for instance, distinctions between subjective and objective factors of disability -- are embodied in statutes of the civil law code? (One interesting aspect of being in Ho Chi Minh City in the early-to-mid 1990s was watching the Vietnamese begin their struggle with the process of creating from thin air a civil law code. They were under great external pressure to implement statutes of civil law, particularly after removal of the U.S. trade embargo. Most other Southeast Asian countries had simply imported en masse a foreign corpus of civil statute -- German, French, Dutch, British -- to which they proceeded to make minor modifications. The Vietnamese have not done this; they have begun to build theirs up step by step relying largely on their own judgment. A unique enterprise in this 20th century! Here we have a society with an extremely elaborate animistic tradition of identity transparency, a society with several thousand years of psychological residue of spontaneous social order at the village level and below where virtually everyone lived, coming under enormous external pressure, primarily from the U.S., to adopt a rule framework opposed to self-organization based largely on 17th and 18th century British deist beliefs, about which Vietnamese know little and rightfully could care less. A study of the Human Relations Area Files on [official] Vietnamese village administrative organization from the beginnings of French rule until 1960 [I wrote a 75-page paper on this in 1964 using the Special Operations Research Office library holdings] reveals approximately 100 changes in less than the same number of years. This is an extraordinary legacy of imposed civil statutory alteration to bring to the process of creating a civil law code. The amount of psychological disequilibrium involved is equivalent to that forced upon the Japanese in the aftermath of the events in Edo Bay of 1853. Which are still going on! Societies with elaborate experience of identity transparency had no need of civil law statutes on sexual harassment, for instance; other mechanisms of censure prevailed. Sexual conventions and notions of personal space were utterly different from those of societies based on the incapacity to experience identity transparency. Animistic peoples once had, to a degree unimaginable by most people today, very, very different experience of “my body” and quite little experience of “not my body”. Whole galaxies of psychological capacity are simply being wiped off the planetarium of human cognition under the barrel of a gun! Presently, in Japan, there is mild residue of identity transparency -- actually, a profound interior struggle with its growing absence -- and an imposed civil law code of foreign origin, with little or no connection to cultural history of the society.) Not to mention names! In traditional societies all around the planet, personal names were filled with every sort of cosmological metareference, one of the primary facilitators of social self-organization. Standardize names so they fit on standard forms, so binary processors can easily handle issues of simple-identity, and, likely, in and of itself, this is sufficient to prevent self-organizing social systems. Those who think they can bring about self-organization in Newtonian institutions -- today, chaos and complexity theorists -- have produced a theory of self-organization which leaves out the actual agency of self-organization in physical systems: the quantal identity transparency characteristic of collective and cooperative behaviors like superconductivity. Being aware of some of this, I went back to college to study music composition and painting in an attempt to gain insight into synaesthetic fusion of the sense modalities, and to see if I could thus arrive at any idea about how to create the psychological, social, and cultural concomitants of self-organization in contemporary post-industrial settings. Throughout the remainder of the 1970s, I found myself informally studying self-organization relative to autogenic brain discharges, severe local storm genesis, and the quantum chemistry of DNA.

During the early 1980s, an attempt was made to return to the high-school idea of functions of exchange being mapped on a complex topological surface as logic-lattices. I knew enough at this point to realize that the logics involved could not be binary, could not be Boolean. In the late 1970s, I had spent sufficient time in the Cornell mathematics library to become aware of Emil Postís “m-valued truth systems” and to strongly suspect that Postís idea held the key to an authentic post-Bretton Woods, post-Newtonian monetary system. I now proceeded to my first serious attempt to pursue this line of thought. The immediate obstacle was that Postís 1921 interpretation of his own logics as “truth systems” didnít make any sense to me. It was also clear that this interpretation didnít make sense to Post either, as at the end of his earthquake of a paper (far more revolutionary than Einsteinís relativity theory) he stated that the binary order of value is the fundamental order because it conforms most fully to completely true and completely false -- which is to inform the reader that everything explicated earlier in the paper is a matter of no real concern. Quite a bizarre conclusion! It is my understanding that the u in his uTm classes of m-valued logics was chosen because of this depotentiating interpretation. The u for unary: one. Though the m removes the undistributed middle from being a fallacy (hence creates the possibility of fuzzy logic), the presence of u leaves the fallacy of contradiction as a valid notion, and supports Russellís attack on Cantor, thus preventing application of Postís logics to interpretation of the m-valued Eigen functions associated with Schrödingerís wave equation. These people knew what they were doing!

A close reading of Russellís World-War-One-era PHILOSOPHY OF LOGICAL ATOMISM reveals that, even then, he was aware of non-binary propositions and regarded them as increasingly meaningless the more logical-values they contained. Implicit in this assessment (which is similar to Postís) is a theory of semantics rooted in binary recursion (itself rooted in PRINCIPIA MATHEMATICAís Type-theory-based attack on Cantorís Unrestricted Comprehension Axiom, and which, in the Unified Science Movement of the 1920s and 1930s, became evermore dominant, until, following WWII, there was no other permitted). This recursive theory of meaning basically denies any cognitive value to synaesthetic cross-modal correlations of the senses -- or so it seemed to me, who was at the time these thoughts appeared practicing colored-hearing synaesthesia in music-art studies. This evaluation on my part, of course, led to another interpretation of the meaning of orders of logical-value in propositional calculi: not degrees of truth-value, but degrees of animistic identity transparency, of Einfühlung, of quantal relative-state, of amae as the Japanese say.

Russell wrote his book on logical atomism when controversy over the Axiom of Choice had attained a peak of hysteria, and his argument from the realms of logic was staunch support for those opposed to acceptance of this axiom. Postís later-explicated m-systems of logics validated (but could not interpret) an infinite number of logical-values to a given proposition. What order of infinity? was a question not then addressed (let alone, whether different orders of infinity in logical-value might mediate different functional modalities of general systems, and be associated with topological transformations of such systems at limiting velocities, accelerations, and time-rates-of-change of acceleration of variables of motion: see our paper “Toward a General Theory of Process”, 1977). Much was at stake here: Dedekindís treatment of a limit in the calculus as a “cut”; the validity of the very idea of initial and boundary conditions relied upon to solve systems of partial differential equations, linear and non-linear; the validity of the prevailing understanding of the meaning of integrals and anti-derivatives; the fact that definablility of the linear-time arrow cannot be maintained under the Axiom of Choice or propositional calculi with m-orders of logical-value. Even the isotropy of ponderable space at uniform curvature is deeply called into question. Allow meaning to propositions of increasing orders of logical-value and many such demons raise their heads. It is no wonder these matters were swept under the rug by the probability amplitude interpretation of Schrödingerís wave equation! and the unary dis-interpretation of Postís multi-valued logics!

The fact that Alan Turing was vectored on re-opening this can of worms, until inducted into the Nazi cipher code cryptanalytic task (which he undertook at the outset by rejecting the Axiom of Choice, i.e., ruled out consideration of an infinite number of operations), has such a skin-crawling uncanny feel to it of what Freud called the “psychopathology of everyday life” -- here in regards to collective behaviors -- that it is hard to escape the conclusion that origins of WWII are somehow related to these intellectual subterfuges. In any event, I personally could not escape such thoughts in trying to develop the notion of functions of exchange as logic-lattices on a complex topological surface.

What sort of surface? That is dictated by two primary considerations: (1) m-valued propositions require m-valued functions; (2) m-valued functions are mapped on a multi-sheeted Riemann surface. Analogy to the multiple overlay sheets of contingency planning is immediately apparent. Somewhat less apparent is that the functions of exchange are related to price as an arbiter of value. Domain and range; onto and into: supply and demand are space and time on the econometric Feinman diagram; price, the function or world-line. The degree of non-linearity is reduced by filtering, by removing “noise”, by designating those factors responsible for non-linearity as “externalities” -- or by reducing the filtering and treating the involved factors as stochastic. All of this is simply deteriorated-Newtonian chromaticism, whereas entry upon the dodecaphonic post-Newtonian is to parameterize the factors responsible for non-linearity as m-valued functions and evaluate them via m-valued propositions (which requires, not a Feinman diagram, but a universal covering surface, a species of Riemann surface). Price is the processor which specifies action directives (Buy! Sell!) in the market micro-environment. If price is to be an m-valued processor, e-money must become m-valued money. Itís as simple as that. Who cares about the calculations of economists? Price is the processor, not some economist! Only when the system fails to allow price to adequately process are calculations by economists required. Techniques of contingency planning applied to monetary exchange units are required not to influence market outcomes, but to put in place a system which allows price to adequately process.

Therein lie all the problems of application. The linear-time-bound mind understands planning only as an attempt to control outcomes. The notion that planning is required to create and maintain a system where control of outcomes is not only impossible, but has no meaning, is not comprehensible to the linear-time-bound mind. All attempts to use multiple scenarios planning, alternative economic indicators, sustainable development indicators, chaos and complexity theory as routes of entry into m-valued monetary systematics have, therefore, failed.


Return to:
•Top
•The Ithaca Papers -- Abstracts
•Home page