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<The world will follow the power law>
This world is following the power law rather than the normal distribution…I’ve heard the words lot of times recently. Those who are quick to understand may recall the Benford Law. It’s something like saying “The frequency of the first numbers of values which appear in the nature will not be evenly”.
Those who are familiar with the complex science system may recall some words such as Chaos, Fractals or self-organization. It’s a thought that “Even if the system looks like complex at a glance, many of them will be canceled out by interactions of each factor, so the output of whole of the system will follow a simple law”.
Even in terms of strictly meaning, there are the biological scaling rule about the relation between body length and weight, the Gutenberg-Richter law between frequency and magnitude of earthquakes, the Pareto Law about income distribution and so on. There are also more gradually experimental rules such as the distribution of wild animals and plants, numbers of cities and towns every population scales, the world of show business including a handful of top stars and many others.
“The invisible hands of Data” which is one of recent topical books in Japan is picking up the power law empirically as a basic rule of economic society such as our daily activity and inactivity, the relation between productivity and social graph or the effective design of a selling place. The latest work of Peter Thiel “Zero to One” is also focusing on this power law as business model of VCs and he claims that it is essential to generate something from the place where is nothing.
<The collapse of the growth model under the multipolarization of money flow>
If simplifying the words of the beginning of this entry, it can be said “People are likely to regard stochastic phenomenon as even distribution around the average, but in reality, many issues can be more understandable with regarding as uneven distribution like concentrating around the zenith”.
In terms of economics, one of thoughts worth of referring is the economic geography of Pole Krugman. His “Spatial Economics” which has been built from the theory of trade and the international economics are strongly colored by the complex system science such as self-organization or path dependency.
If being in such a position, it seems to be a kind of beautiful illusion of economists to regard the macroeconomic equilibrium as a steady state. Surely, water flows to high place from low place, and as its result, the its surface will be leveled. However, there is much difference of depth between shoals and trenches.
In fact, the disequilibrium with uneven distribution is a steady state, and especially, such a tendency has been accelerated by capital transaction that has led actual transaction under the multipolarization of money flow. While adjustments in an actual side take some time, adjustments in a capital side can be done in a moment by the international settlement network.
The results of both sides will be likely to become unevenly distributed, and the difference of these will generate some conflicts. Of course, textbooks say that such conflicts will be adjusted and cleared by interest rates and exchange rates, but such function has a certain limits. That’s why disequilibrium in capital transaction of multiple economies is likely to be balanced by disequilibrium in actual transaction. When thinking such a way, it will be easier to understand the economic dynamics among nations and regions.
Even before this time, I mentioned such an idea, for example, in entries including “The Disequilibrium Economics“. Thus, this world will not become flat one which is drawn by the standard theory, but will turn into something filled by unevenness with center and surrounding.
To make matters worse, it is likely to lead to the balanced contraction such as today’s mercantilism spreading all over the world. Each nation and region is setting their hearts on reducing deficits and earning surplus because of the doubt to credits triggered by the financial crisis, but all of them cannot become surplus at the same time. That’s because surplus and deficits will be canceled out and their total will have to become “zero”, if watching whole of the world.
Therefore, if everyone wants to become a creditor, we may fall into the balanced contraction. We have a valuable example of how not to behave about a result of such a circumstance…Twice world war is it. Of course, that may be going too far, but I feel that we cannot deny such possibility if thinking about today’s international society.
To begin with, such a issue has been caused by the inconsistency between many countries’ growth models which have depended on the market of U.S. and a reality of the multipolarization of capital flow after the crisis.
<The time when a society exceeds a state>
The reorganization and consolidation of economy beyond states will have a certain impact to society and culture. Then, that may bring something like friction against the existing government structure.
Originally, something like paradigm of thoughts lying under the society and culture is familiar with the power law. That is one of results of the network externality of economics, and in short, the more those who believe it increase, the more its influence becomes strong. If the existing governments cannot draw any vision to solve issues under the world where uneven distribution and disequilibrium becomes a steady state, it’s natural that people’s thoughts and worldviews which are closer to nature want to accelerate the reorganization of this world.
One of typical examples may be the gain in power of the Islamic State in the Middle-East. Of course, their atrocious behavior cannot be forgiven, and also, their self-righteous and exclusive stance should not be desirable. Nevertheless, we have to note that they have gained in power since the fluidization of Islamic powers triggered by the change of the stance of U.S. to non-intervention. In addition to that, it’s important that their centripetal force has been based on the thought of extreme fundamentalism.
However, the international society seems to have no measure except familiar military methods. That is something like a battle of “violence based on the authority” against “violence based on the thoughts”, and we have never found a way of breakthrough for solving such issues except forcible ways yet.
That’s why U.S. has been forced to return to the intervention diplomacy, and even Islamic nations which are Sunni as same as Islamic State have no way but to join the Coalition of the Willing. In short, the conflict between authorities and thoughts has been replaced by the conflict between violence and violence. After such circumstances, is there any future?
A more moderate incident may be, for example, the poll of residents about the independence of Scotland. This case is also a schema where a nation is set against a state.
Come to think of it, U.K. is one of countries where a wind of the neoliberal reform blew at first. Surely, the resource allocation of the private sector should be market-oriented as possible, if considering harmful effects of discretion such as inefficiency or vested-rights. However, that is especially why uneven distribution and disparities as a result of market mechanism should be leveled to a certain degree, because they will disturb sustainable growth of macro economy from the demand side.
That should be an original function of the public sector, but the radical atmosphere of the reform denied even such a role. This time’s independent movement may be one of its results, and if so, that may be able to give some suggestions to the inter-regions relationship of this country where the system of income redistribution and circulation between urban and rural areas has been being collapsed since the end of 1990s.
<After the struggle between Anarchism and Fascism>
After all, today’s friction or confuse of this world has been caused by the conventional powers which has been deeply attached to the outmoded framework though the status of states or governments have fallen. The movement that wants to keep back such collapse has occurred various conflicts, while doubts to credits triggered by the financial crisis have unmasked the demand bubble based on the credits of the key currency system beside the borders which were drawn not in connected with culture or nations have faded out.
Accordingly, this undercurrent is also related to the recent conservative swing of our country. In short, that is something like such a movement which wants to stop collapse of the conventional authority of the state, in addition to the hard-liner oriented stance of executives of the government, the reaction to worsening of the external relationship, people dissatisfaction against increase of disparity and so on.
Now, this world has already been colored by struggling of the conventional Establishment who wants to protect their own privileges and vested rights, while the thoughts which can destroy them have been actualized gradually. Although it’s too extreme, against the accomplishment of a power law which has been brought by the globalization that is originally anarchism, the conventional authorities have become more fascism in order to countervail, I guess.
In terms of economy, in place of mercantilism which will bring balanced contraction, a shared understanding of necessity of inter dependence among every entity of economy will be needed because uneven distribution and disequilibrium is the steady state. In terms of culture and thoughts, in place of military conflicts, the international society will have to become more multipolarism society which will accept the relativization of the dogma of universality of the Western Modernism.
Maybe, when the new values and thoughts which can sublate both of anarchism and fascism were submitted, we may be able to stand on the entrance of the new age.
Recently, I frequently hear words “ZERO to ONE” due to an effect of work of Peter Thiel above. However, I rather think that “ONE to ZERO” may be more important in order to create new “ONE”, because this world has already been filled by old “ONE” with many finger marks.
Well, if we are forced to make the ultimate decision between “the society under protection without freedom” or “the society under freedom without protection”, which will you choose?