The way to tell the difference between a good deal and a sinkhole is by tight feedback loops in the evolutionary topology. The outcome has to either kill or grow the decision structure directly. As an illustration, consider that the Argentinian mob will never know jack about economics.


The mob's problem is not their inability to select a leader whose plan will cure the economy. The problem is their attempt to elect any savior who promises to supervise local activities centrally, and the local disasters then not feeding back directly to distress at the center - and the local decision about whom to put at the center not being directly connected with the local disaster.


When economic activites are supervised locally, wealth and responsibiltiy is gradually shifted from a thousand failures to a thousand successful people. And the locus of decision making gets closer and closer to the firsthand information. Meaning, you have to be close enough that if they can't sort but you can, that if they die then you do too. As long as the price is paid by the person who is wrong - and the decision is disaggregated to target the specific error - then it sorts itself out.


Let's go back to 1983, before anybody knew what AIDS is. Nobody could test anybody for AIDS. But, culturally, people had been instructed not to engage in promiscuous sodomy and drug use. I don't count on anybody's ability to evaluate what is offered him in the sense you mean it. If that was required in biological systems, dogs would eat rocks. It is not necessary to know how we select what to do or not. What is known is that easily-selectable processes - and easy ways to select them - will sort themselves spontaneously out of an incomprehensible mismash, through very rapid evolution.


If you have seen me post about my OFT (Orderly Feedback Theory), you will understand the easiest way for structures to evolve which can cope with their environment is when their internal complexity is equal to the complexity of everything they are adjacent to, on all subspheres and super-spheres. If the decision maker is unequal to the decision, the apparatus simply needs to be broken up into smaller, separately-evolving entities.


But pushing scales in the opposite direction is information friction. It is easier for a population of similar people to ship their similar investment objectives in to a central manager - in terms of an incentive-marker-and-feedback structure - than for the central information and transaction facilities the manager is adjacent to to be made adjacent or routed to all the similar individuals separately.


The outlier brain has historically been so much bigger than anything it could be directly adjacent to. So you sub-ship or compact large decisions, affecting large numbers of people, involving large numbers inputs, down into small structures, involving small handfuls of people working very closely as a team. That way, you took advantage of historic links in proportion to their cost and availability, by having a small marker link back to the affected atoms, and a wideband link from remote sources carpooled to the central decision maker.


Of course, when people pool together, they more live and die all at once, and there is less chance to discover and weed out new evolutionary advances. Or, when traits are lumped together in single decision structures, a single bad trait can kill all the good traits. Diluting dominant traits is a primary accomplishemnt of multi-sexual recombination.


In case you still don't follow my argument, let's go rigth to the heart, the human brain. There is no small subset of synapses that is capable of choosing between correlated instruments to add to a portfolio. There may not even be an entire, single person who can do it, he may need an outer layer of assistants, filtering and passing in only the most relevant information. All these things work because the simple decision sub-structures they are made up of have few enough links, to a simple enough environment, that they can evolve to make a correct decision which they are up to or equal to.


In case you haevn't noticed, one outcome my theory implies is that the Internet revolution was required by the laws of physics to precipitate business failures on an unprecedented scale. You simply cannot connect all these structures together - so that the price chart of memory chips for instance would take over 2,000 coefficients to curve-fit - and expect them to adapt ways to cooperate.


To try to insert a facility like VerticalNet between a population of global business would be like trying to build a person by connecting a stretch of continuously-conductive wire between his eyeballs, to his tongue, and to his hands and feet. There has to be a sufficiently-complex initial internal structure for the adapted structure to weed itself out of by junction busting - on sub-scales and super-scales. (In terms of hemispheres and regions - rather than just being a continuous mass - notice the brain is born with some junctions already busted.)


It is very difficult for many buyers and many sellers connected by a central auction to coordinate production and consumption rates with random external disturbances. It is much easier for a single buyer to coordinate with and adapt to multiple sellers. Or, it is easier if some parties have higher friction than others, meaning some adapt and react, and some are fixed quantities from the point of view of others.


I have also touched, elsewhere, on the idea that OFT is why what we perceive as space - what I call "photospace" - has shaken itself down to three dimensions. Notice the intra-nuclear forces and topologies may not obey the rules of the electroweak force and three-dimensional space. But the relationship between their internal complexity and the outside or photo-world is mediated by the electroweak force - and a proportional number of intermediate electrons - to complete the super/sub transition comfortably.


So, in conclusion, the necessity of having extremely complex or central decison-makers is a byproduct of having to carpool high-cost information adjacencies. In the past, it just wasn't cost-efficient to have zillions of atomistic decison-makers. The more independently-evolving entities you had, the number of connections necessitated between them rose geometrically. The end-pattern permutations are constrained by and reflect where the original bottlenecks were.


Meaning, historically, the brain was exosomatic, but intraskullular. Now that we have extra-body connections as cheaply and abundantly as intra-body connections, it is much easier to form into multi-person, or "superindividual" brains. So, historically, we had these islands of very tight-knit people, sitting together in meeting rooms, and connected at high bandwidth - but with these huge gulfs between them. Nowadays, the face-to-face structures are being dissolved by competing cyber-space adjacencies.


We just don't need single smart people, or single firms - or gorups of smart peopel talking to groups of smart people - as much as we used to. But at the same time, people who are connected willy-nilly by wide-open, unregulated bandwidth, just burn out like filaments. So now we're left with these small pcokets of profitable businesses, at the middle of these huge information wastelands where nobody can survive, like Nasdaq dealering.


And this cold, wide-open, zero-firction, 3D-continuous wasteland is constantly eating at the little embers of high-friction, face-to-face warmth. So what we need to do is install some basic atomic forces - meaning private-property barriers - into the information superiogighway, so it can resolve itself into discrete wormholes, which weed themselves in and out, like in physical space.


Of course, some knots, which start out leading a lot of places, and well up from great distances, may always need smart people at the middle like Javelin to untangle them The whole purpose of "continuous," 3D space is to diffract these knots - meaning if there were nano-investment bankers, we could have 11-dimensional space, transoceanic wormholes, you name it, and Javelin would run a big central switching station, to match off and dissipate all the stacked, flanged, aliased, magnified, and backfeeding shocks from parts unknown.


Anyway, more later, and here are some supplementary posts:


http://www.twoplustwo.com/cgi-bin/ne...s.pl?read=1679


http://www.twoplustwo.com/cgi-bin/ne...s.pl?read=1823


http://www.twoplustwo.com/cgi-bin/ne....pl?read=35230


http://www.twoplustwo.com/cgi-bin/ne...s.pl?read=1497


eLROY