The Matrix and the Superorganism

On the latest episode of Flight of the Conchords the other night, the prime minister of New Zealand, on a visit to the United States, believes he's living inside The Matrix and, detecting a glitch (deja vu), leaps off a building to escape. This is good TV.

Aside from comic relief, the show's invocation of the Matrix resonated as I read Tim Flannery's interesting review of what sounds like a fascinating book, The Superorganism. In what struck me as a stretch, Flannery sought to analogize the superorganism civilizations of ants to human society, particularly the continued growth of the Internet and global concerns like climate change and economic meltdown.

Humans, perhaps thankfully, are still a long way from building a global superorganism, whether intentionally or not. Even advanced societies do not function in the finely striated ways that ant colonies do, despite the awe-inspiring realization that human societies, like the ants, operate smoothly in the absence of any controlling intelligence.

Yet a reasonable analogy between ants and humans might be the systems that humans build, and I have in mind specifically the global financial system. This seems to be a close approximation of the ant superorganism in that the division of labor is quite deep, the system can often be said to be acting in one unified direction (up or down), there is innovation (ants "invented" agriculture long before humans), and it is marked by behavior in response to discrete signals.

So how does such a superorganism collapse? Here, the story becomes almost entirely human: as Alan Greenspan observed, there was "a flaw in the model that I perceived is the critical functioning structure that defines how the world works." What was the flaw? Every commentator in the economic and financial world has answered this question, but it really comes down to something as old as human civilization: hubris. Probability and risk (really, uncertainty) were distorted, misunderstood, and subsumed within an irresistible superorganism of hubris.

National Public Radio reported the other day that college students, in response to the financial crash and recession, are flocking to a major in economics. This seems understandable, but I can't help wondering: if the current generation of economists utterly failed to suspect something to be a tad askew with the global financial system, will the next generation? (Trained, incidentally, by today's economists.) Given the entirely human traits involved here, perhaps literature or classics or history would be better-advised courses of study? 

Or let's update those staid majors, even. I heard somewhere recently that some college or university now offers a master's degree in the Beatles. Maybe we need one in The Matrix as well.

Comments

[Derek Ozkal]

Not all economists believe the role of economics is to predict the future:
“To a modern Austrian, economics is the study of the logical implications
of the fact that people try to do the best they can for themselves,
as they see it, within the context of the constraints and institutions
they confront. Economics involves an examination of both
intended and unintended consequences of human action. These consequences
are logically inferred from the economists’ understanding
of the exchange relationship and its results, that is, its “spontaneous
orders” (Hayek [1968a]1978, pp. 181—84).”
http://www.cato.org/pubs/journal/cj9n1/cj9n1-10.pdf (page 206)
As we’ve discussed many times, the key problem is that economists desperately try to make their discipline a science rather than a social science… hubris indeed!
Love the blog, by the way.

[Dane Stangler]

Thanks, Derek. Great point.

[andilinks]

Economics is a social science that tries so hard to mimic hard science that it gets mired in statistics and methodology forgetting that the herd is out to defeat it for their own gain by any means possible.

As soon as an economic model becomes effective or appears effective it will be incorporated into the real world and oscillate when people use it, not to understand the system but to game it.

This is my first visit to your blog, I'm impressed and will be back. :)

[Cheap Jersey]

Even if you consider that selling apps is not the carriers' businesss

[sports hats]

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