Note: Regular readers will note that I did not post on April 24. My lovely bride surprised me with a birthday trip to St. Martin and I connected to abundant nature rather than the net. I trust this post was worth the wait. If not, take a vacation to St. Martin and it will make more sense.
Should you wish to have your cognitive boundaries stretched, read Joseph Jaworski’s Synchronicity, Karl Popper’s The Open Society and Its Enemies, and Jared Diamond’s Collapse in the space of a month on the shores of three different oceans separated by at least one transit of the dateline. Immersed, as you would be, in consciousness and nature, the works take on dimensions that remain illusive if absorbed in an armchair sipping a beverage. In each of these works, you see the effort of diplomats – emissaries from both the prophetic and the prosaic – who passionately seek to awaken humanity from narratives of obsolescence, self-destruction, and shared epochal tragedy to illumine a possibility for a more suitable humanity. Along with my most recommended of authors – Gregory Bateson – they attempt to navigate dimensions of inquiry with words which belie the vision they seek to describe. Each one seeks the elixir of essence through the coarseness of language constrained by archetypal metaphor.
I am embarking on an expedition of sorts in this, the first of a series of three posts. Unlike the Homeric tomes referenced above, I will, in brevity, seek to convey essence which I have come to understand as an imperative in the understanding of our economic frameworks but, which through careless neglect, is passed over unconsidered. It is not accidental that most deist traditions include in scripture the prohibition of graven images. Divinity instructed that essence, not artifact, should be the object of veneration. It is also without puzzle that the epic of spiritual traditions involved journeys – not stasis. For it is in the physical and temporal transience that revelation can evoke clarity of purpose unimpeded by monochromatic redundancy. So too, we need to understand that in economies (remember the etymology of the Greek word meaning “management of the household”), it is in the journey through exchanges that value is manifest. In our insular view of post-Modern consumerism, we have lost the recognition that hording – an artifact of fear and mistrust – shares no association with wealth. Wealth, in its ideal form, is the capacity to engage fully without limitation, not the capacity to survive an uncertain (and feared) future.
Upon this canvas I would like to explore the concepts of Phase and State Coherence and Dissonance and the role these dynamics play in the understanding of value exchange. Notwithstanding the limitations of language mentioned above, I have chosen these terms as I see them representing a dynamism which is lacking from many of our economic nomenclature. Let me simply introduce what I mean by each of these and, in the weeks to come, I will attend to a deeper explanation of both in a variety of contextual frameworks.
Phase – the period or pulse (measured in time, magnitude, or field effect) in which essence and value are manifest, recognized, transacted, utilized, exchanged, and retired or unseated. This concept incorporates principles such as invention, innovation, incrementalism, obsolescence, duration, maturity, and life-cycle but transcends them in that Phase is perceived through cycles and consequence in totality – not in punctuated episodes.
State – the form (measured in commodity, custom & culture, knowledge, money, technology, well-being) in which community consensus coalesces to denominate a manifestation of matter, energy, surrogation or experience. This concept includes science, mathematics, social order and convention but transcends them in that State incorporates the unconstrained completeness of matter, energy, or experience.
Coherence – expressions in which amplification, propagation, transfer and transcendence are complimentary, promote efficiency, and optimize common access.
Dissonance – expressions in which interference and friction impede or restrict propagation, promote discord or obfuscation, and thwart transfer.
To understand these concepts in a practical application, let me explore a few examples and remind you of some earlier references to these principles.
When one prepares an umu in Samoa (a cooking method in which food is prepared on the ground with heated stones covered by leaves), one of the dishes which may be included is palusami (a dish that puts creamed spinach to shame). This mix of taro greens, coconut milk and salt is prepared in large waxy leaves and placed in the umu. The cooking stones are heated with a fire made from the coconut husk and leaves from previous umus. The State condition is that the whole of the coconut and the taro are used – in an unaltered state – to supply nutrition. The “waste” – in an unaltered state – is used for fuel to heat the cooking stones. The Phase involves a complete first use (food), second use (fuel), third use (ash to the garden) engagement of every State (coconut and taro). In this example, we find Phase / State Coherence as there is no point in the process where the State of a thing requires alteration and, save the caloric input of manual labor to collect, prepare and consume the food, the system achieves its utility without significant alteration. A State change occurs to the coconut husk at its burning, but is harvested for a Phase utility – the heating of stones. This example serves as a representation of an efficient value exchange with high coherence.
When, incentivized by Federal tax policy reinforcing the centrality of home (real estate) indebtedness as a means of serving innumerable purposes, the U.S. government encouraged patriotic consumption in the wake of the September 11, 2001 events, by inducing re-financing of home mortgages allowing them to serve as the ATM for stimulating consumer spending. Our economy didn’t grow. The illusion of perpetual asset value increase grew. The State of real estate did not alter. The Phase of indebtedness – that wonderful, insurance-driven actuarial 30-year intransigent fixture of Occidental finance – didn’t alter. But what did alter is the decoupling of actuarial assets – homes and real estate – to purchases of consumer goods and services. The Phase dissonance made the 2008 financial collapse perfectly predictable (as evidenced in my speeches in 2006) as the Phase of consumer credit operates in 3-5 year oscillation periods where, on the second attempt to prop up the illusion, the absence of assets becomes visible and, voila, the market fails. In short, the economic policy of the G-7 was to seek to create State dissonance (use real estate to prop up consumer spending) by forcing – albeit unconsidered by most economists due to professional courtesy and wholesale irresponsibility – Phase dissonance (attempting to blend 3-5 year duration risk with uncorrelated 30 year duration risk). In this instance, the combined Phase / State dissonance led to collapse and, to this day, no substantive policy or regulatory change has been possible as, to date, no one still is paying attention to the systemic dissonance.
CNN recoiled with the breaking news today that gasoline prices were crossing a $5.00 per gallon price. Economists quoted in the Wall Street Journal and Financial Times all talked about the effect of high energy prices on slowing consumer spending. Somehow missing from all these conversations is the Phase / State coherence of what’s driving gasoline prices. We know that states are all suffering economic shortfalls and we know that approving taxes has become taboo in Washington courtesy of the pro-limited government conservativism of tea party elephants (the same ones who spent like drunken sailors the last time they controlled the purse). The collusion between the oil industry and the government is a wonderful example of Phase / State coherence. States derive significant benefit from taxes levied on fuel. Many states collect revenue as a percentage of the price of fuel. Not surprisingly, states with the most bleak economic conditions represent a disproportionate number of those who also tax gasoline at high percentages. So, using State Coherence, the gasoline price is encouraged to spike in Phase with the revenue benefit to the state. While we may find this Phase / State coherence reprehensible (or, God-forbid, collusive), one thing is certain. We are having taxation incented energy price spikes where NO external Phase or State condition warrants the spike. And the reason why we won’t have anti-trust oversight on this (notwithstanding President Obama’s Facebook appearance where he wanted to ‘connect’ with real people), is that the State Attorneys General who would need to launch such an inquiry draw their salaries from – you guessed it – the racketeers.
We will explore, in the coming two weeks, a deeper discussion of Phase and State coherence. We will look at how, by viewing economic and social systems through these lenses, we can unravel inefficiencies and willful incumbent power systems which, when exposed, allow us to consider alternative forms of engagement.