Decision-making, Public Oversight, and Privatization

A gracious thanks to Mr. Hugh Hamilton for arguing with me upon my delivery of this topic. His live radio program, TalkBack! (where he takes calls from confused people like me) must be a vital part of the education of anyone who listens on a regular basis. It can be heard weekdays from 3pm-5pm, on WBAI 99.5 FM or at wbai.org. The following does not necessarily reflect the views of Mr. Hamilton in any way, however.

There is now a disconnect between our system for ensuring the beneficial effects of public oversight via government and that government’s ability to provide those benefits within the financial system that enables it.

An introductory note should begin by distinguishing between potentially fuzzy understandings of decision-making. Decisions are made both by individuals, and by groups, and they result from both conscious and unconscious processes.  The majesty of the democracy as practiced in America, for example, is that it takes input from and feedbacks with a large group of individual decision-makers, to create a collective decision-making apparatus, that, by way of its feedbacking abilities, maintains a balance between what the individuals want and what the group wants (the group in this case would be the American voters). Over the years, the structure of decision-making for the financial aspect of our government has become increasingly separated from the same structure which drives the “upholding of public safety and public good” part of the government. When not being held accountable for people, the market is very good at what it does, which is to make sound, collective economic decisions.

The travesty here, is that the economic part of this system works by a different decision-making apparatus, one which seems to have adapted more readily to a complexifying world, but one in which we, the people, are not part of that apparatus in any meaningful way in regards to oversight benefiting our own public good.

The financing, or economic part of our government has been intercepted by the private industry, that is, any for-profit industry which makes its collective decisions from the aggregate of individual decision-making in the market. This interception is visible both in the private industry’s ability to manipulate the feedback system of government, via things like Citizens United, and in the private industry’s ability to sidestep the laws used by the government to ensure the benefits of their oversight. In these regards, the private industry has shown that its form of decision-making is better at playing the game than ours. It’s not about right or wrong, it’s about who’s winning, and the private industry is winning right now.

It would be unfortunate if the private industry continued to take over more and more of the decision-making that is not, but should be, done on our behalf. So we have two choices: We either change the decision-making apparatus in our government to act more like the market, or we change the myriad decision-maker market to look more like a democratically-elected government (whatever that may come to mean in the near future).

How do we begin to interface with private industry directly? Maybe the government (as it now stands; we’re not talking anarchy here) should no longer be our mediator. It shows itself more every day to be failing at its task in this. That private industry manipulates voters and sidesteps the law supports this notion. We the people have yet to find our voice in this system.

How do we get the private industry to do well what our governments used to be so good at?

How do we rewrite the laws of our new government so that we can take back our roles as decision-makers?

note:

I like Richard Wolff’s “Democracy at Work” idea, and I like Iceland’s Crowdsourced Constitution idea.

epilogue:

If your only objective was to get as much money as possible, and you could totally ignore the needs of the people, wouldn’t you do the same thing as the banks? Theirs is not to think about the public good, only money. No concern for people, not now, not ever. Banks aren’t people, but they are controlled by people – individuals making decisions that filter up to other hierarchically arranged groups of people and so on until you reach the designated collective. The purpose of all the individual decision-makers involved is to make the right decisions in the hopes that you can keep the thing going. Greed is just another word for momentum.

The financial system, the private industry, Capitalism, are all really good at looking out for themselves. They aren’t stupid, though they aren’t conscious either. People tell these things what to do. We should be those people.

update:

I guess it should be noted that the market actually now makes decisions based on algorithms, the workings of which we, at times, don’t even understand. This puts the decision-making of the private industry even further away from the one used within our governments.

NYSE looks into 'irregular trading' in 140 stocks

1 August 2012

“Reports in US media suggested that a trading algorithm used by the brokerage Knight Capital may have been behind the stock moves.”

http://www.bbc.co.uk/news/business-19087748

Raging Bulls: How Wall Street Got Addicted to Light-Speed Trading

BY JERRY ADLER 08.03.12

“For the first time in financial history, machines can execute trades far faster than humans can intervene,” said Andrew Haldane, a regulatory official with the Bank of England, at another recent conference. “That gap is set to widen.”

http://www.wired.com/business/2012/08/ff_wallstreet_trading/all/

Kevin Slavin: How algorithms shape our world

FILMED JUL 2011 • POSTED JUL 2011 • TEDGlobal 2011

Kevin Slavin argues that we're living in a world designed for -- and increasingly controlled by -- algorithms. In this riveting talk from TEDGlobal, he shows how these complex computer programs determine: espionage tactics, stock prices, movie scripts, and architecture. And he warns that we are writing code we can't understand, with implications we can't control.

http://www.ted.com/talks/kevin_slavin_how_algorithms_shape_our_world.html

go figure:
"Government is too inefficient to make the costs come down to make another Moon landing economic. It will be an entrepreneurial effort” -Harrison Schmitt, Apollo 17 Astronaut

Governments 'too inefficient' for future Moon landings
Pallab Ghosh, BBC News, 6 December 2012
http://www.bbc.co.uk/news/science-environment-20540172