wish there was a way to see financial damage the way you can see maps of forest fires or bomb damage from wars... covid is such a physically bloodless catastrophe it's really hard to see the extreme invisible damage

stuff like this is the financial equivalent of bombs dropping randomly... a bad formula cripples large busy airports with high capex/debt on the books, and randomly drops way too much money on little airports https://www.wmcactionnews5.com/2020/04/20/windfall-funding-formula-allows-some-small-airports-cash-big-stimulus-money/

I have pretty good instincts around how organizations are managed and how they do/should do their actual work (like airports running airline ops), but I have a big blindspot when it comes to understanding the financial engineering structure of the world

every org/institution in the world has a financial shape/size based on its funding sources, capital reserves, debt on the books, stock or bond instruments modeling ownership, etc. The landscape of these shapes and sizes has been simply blown up catastrophically

when I was younger and more naive, I'd ask dumb questions like why, when there is no material damage, and when the financial stuff is essentially arbitrary fiat fictions, you couldn't just "fix" the shape/size of an org in financial terms after a blindside catastrophe

it feels weird to see perfectly fine undamaged capital assets like buildings and equipment undergoing the financial equivalent of being rained on with bombs

But this is a dumb way to look at it. A better way to think of it is like this: the financial architecture of an organization is very much like the software architecture on a hardware device. Most of the value is in that intangible architecture in either case.

Without s/w that can run on it, a hardware device like an iPhone is worth no more than its weight in physical raw materials -- some aluminum and sand and copper basically. It's worth like maybe $10 in raw materials. This is why open/unlocked/non-proprietary is such a big deal.

Financial architecture is like that for institutions. It may seem like an impressive building full of nice standing desks and multi-monitor workstations and aeron chairs etc is "undamaged" by a financial crisis, but if you added up all the value, I bet it would be minimal.

Like, even the fanciest business that is primarily information/culture based, I suspect the material value of the atoms would not exceed say 10-15% of the value of the institution, and the bulk of it would probably be real estate/lease value, not furniture etc.

Even something like a modern restaurant is primarily a financial beast, not a physical beast. McDonald's is financial software running on real estate, with the actual capital backing it in heartland feedlots and flour mills.

"Financialization" is about 50% evil shit done by people with operating under severe moral hazard, and 50% legit effects of where value actually lives in a complex globalized industry. It is NOT distributed in proportion to the atoms making up the physical "plant" of the thing

Like the bulk of the value of Apple right now is probably in the designs of M1/A13 chips and CAD files for say a half-dozen key physical devices that would fit on a small rack of servers at most. Not counting value in people's heads, which Apple can't claim. The rest is filler.

The diff between Apple and seemingly more physical businesses like McDonalds etc. is one of degree, not kind. The real estate and physical WIP stocks account for only a small value of the companies, and most of the financial bombing damage happens in the information structure.

Even heavy manufacturing... Tesla's Fremont factory was an old GM/Toyota joint venture factory. The new operator of the facility is financially worth way more than the old ones. It's all in the financial architecture and software now.

The "commodity atom" fraction value of all businesses is headed straight to zero. Almost all the value will be in a) software b) financial architecture. a) is vulnerable to viruses, malware, hacks etc. b) is vulnerable to financial disasters.

I've used private industry examples, but the same thing applies to public agencies (EPA, FBI, State Department...) that have been relentlessly bombed by Trump for 4 years. And now city/state orgs that are being thrown under the bus with new stimulus bill.

Socialists get mad because they *wish* valuation worked differently: start with uniquely high and fixed valuation of each human being, then value all the capital assets in proportion to proximity to the human element in the system, since that's what makes for stable human lives.

By this logic, McDonald's should be valued as follows: $X per employee, then $Y for the value of the equipment and furniture etc. in the branches the humans work in, etc. etc. Automated, distant things would be worth $0, as would any cloudy automated software.

Humans out of sight in hinterland feedlot operations for beef raising would be worth less than restaurant service workers with faces, names, badges. And people in other countries would be worth even less.

Nowhere in this socialist valuation is the logic of the org factored in

By which I mean -- valuing an org based on how it creates value, which means mapping structure of technology use, intellectual property production and obsolescence, info flows, and so on. Financial architecture is about an uneasy mix of factoring in both kinds of valuation.

"Culture eats strategy for lunch" is pure wishful thinking. It is the belief that the system works for the humans that are part of it, and that those humans are self-evidently the most valuable part of the system. This is unfortunately simply not true. It's just nice to have.

It feels like the noble humanist thing to do to come up with a human-centric valuation and calculus for the nature of things, but that's... not how the world works. Things have a nature of their own. You may ignore that nature, but it won't ignore you.

Covid is ultimately a huge shock to the last bastion of anthropocentric conceit -- that the way the artificial, human-built work somehow revolves around the humans in it. No it does not, and there's no known way to make it work in a way that does at the scale of 8b humans.

I am deeply suspicious of "human-centric" anything because the phrase is anthropocentric conceit wrapped in humanist-values posturing. It leads to the deepest sorts of inhumanity to NOT acknowledge when emergent systems have reached escape velocity from human-centeredness

There is a deep sort of self-absorbed arrogance to acting like it's self-evidently true that large, globe-spanning complex systems should somehow revolve around the humans you see closest to you and care about.

The result is a spectrum of different flavors of human-centric bullshit that leads to completely whacko shape/size of even non-corrupt attempts at responding financially to crises. No matter who is in charge, so long as they think in human-centric ways, they get it wrong.

Idiots on the left want free money rain. Idiots on the right want to sermonize about "personal responsibility." Idiots on the top want to gleefully hand money to each other imagining cronyism is sustainable in a vacuum. Idiots on the bottom want to burn everything down.

Every one of these responses fails through human-centricity. The machine/set of machines must first be in working order creating a surplus in parameter space to allow you to center human concerns.

This is one reason I detest the techlash, despite some justice in their criticisms of tech. The techlash is a bad-faith worldview rooted in a willful ignorance of how the world works, and an arrogant presumption that of course it should work in a human-centric way.

Sometimes I think we need a proper new religion based on unironically and genuinely sacralizing "tech." It is insane that we think people who uncritically worship rocket launches are somehow lesser humans than ones who worship mythical memories of long-ago fake news pseudoevents.

Even if you understand nothing about a thing, worship is a way of centering it and ridding yourself of the assumption that you are at the center when you are not. That's epistemic progress. Even if your mental model of the thing you're centering is completely wrong and childish.

Even if you think rockets work on the principle of dragons hidden in the fuselage breathing fire out the bottom, that's better, tbh, than thinking the world was created in 7 days in 6000 BC by some dude with a white beard who still interferes with "miracles" to guide events.

Yet, which belief gets ridiculed, and which ones gets deeply centered in everything from the social calendar to tax policy to social-distancing exemption policy? Merry covid-spreading Christmas.

I'm not saying ignore human concerns and save the system. I'm saying don't forget that the option of paying attention to human concerns only exists if you pay adequate attention to the workings of world machinery first.

The world today is in a financially bombed out state. If balance sheets and budgets were buildings, it would look like Dresden or Tokyo after the firebombing attacks. Utter gutting and devastation of large sections of the financial built environment.

We don't see this because we never admitted to ourselves that the way the world works, the financial software is in fact the center. We tagged it the preserve of sociopaths, and guess what, system adversely selected precisely the people who had no problems being viewed as such.

Our world works as well as it does, feeding and provisioning 7.8B people with food, water, antibiotics, vaccines, smartphones, roads, transportation, etc. because it does NOT center humans the way a small 30-person hunter-gatherercommunity did when world-pop was 100,000.

The only way to be human at this scale and complexity of civilization is to realize that humans are not the center. Merely the privileged beneficiary of the system being somewhere close to working order.

We are all Eloi living on the surface of the leviathan pretending that what we care about in our little lives is what matters for the whole to work -- family, music, jokes, twitter, etc. The small minority who center a search for the actual soul of the beast get tagged villains.

Yes, there are venal elites, corrupt patterns, oppression, and all that, but all that is STILL human centric. It is peripheral to the way the machine works the way first class vs. coach and legroom issues are peripheral to how an airplane flies at all.

I think trying to make things human-centric and focusing on ideological blame games is the Original Sin of systems thinking. It's as silly as trying to make the solar system geocentric by force. The center is where the center is. https://twitter.com/royking3/status/1341116110498713600

The human imperative is to always be seeking new ways to decenter ourselves, shed more layers of our anthropocentric conceits, and try harder to discover the true centers of things that concern us.

It is *easy* to diagnose and act on systems in human-centric ways because human brains are wired to work exceptionally well around questions of fairness and cheating. That does NOT mean questions of fairness and cheating are the most important questions.

To return to my plane example: Is it unfair that some assholes occupy too much overhead bin space? Yes. Is it unfair that tall people have to be cramped in their seats? Yes. That doesn't mean any of it is central to how planes fly.

To return to my original point of departure for this rant -- why DON'T we have maps of financial fallout damage the way we do wildfires or bomb damage? Why is our situation awareness of what is actually happening so shockingly bad?

Why are we unable to place debate about economic damage vs. fatalities on a firmer empirical footing by actually mapping patterns of economic damage on balance sheets even though buildings are still standing? Because we are "human centric" egotists who think we are the center.

It's not all bad -- some of the data IS available, and mapping it all IS far harder than mapping geography. My beef is with the attitude that it is immoral to take it seriously and try because of course everybody already knows the "right" answer. https://twitter.com/vgr/status/1341118955449028609

Like this recent stimulus bill. 90% of the commentary is on a) the inadequacy of the $600 checks, b) the fact that they shoved in the 3-martini-lunch tax break to get the deal done.

The fact that they mostly stiffed city/state governments is a footnote. Actual financial bomb damage -- like small airports getting big windfalls and critical infrastructure big airports in the financial ICU, is being ignored because we don't have maps/situation awareness.

Yes I understand this is still a triage-style bill. Yes I understand there is a lot of need for band-aids before people can even think beyond their next meal. But there is a deep reluctance to even think about the nature of the damage and what long-term recovery might entail.

We do not want the development and deployment of the vaccine to be the last heroic thing the crippled global system does for what are essentially its human intestinal biota.

There should be a name for this syndrome of believing "if we built it, we must be the center of it."

"Built" does a lot of work in the conceited relationship of humans to the "built" environment they merely had a small role in catalyzing the emergence of.

"Technology is just a tool," and "markets should serve humans" are propositions that emerge from unexamined, uncritical, self-important anthropocentricity. The artificial world is vastly more emergent than we think. It needs to be studied, understood, and related to like nature.

Herbert Simon/Sciences of the Artificial vector of thing is unacceptably primitive still. That shit hasn't moved since 1970 and vague noises about "weakly coupled systems" and other chart-porn bs from the first pass 50 years ago.

I'm gonna call my new religion Stackocentrism. Things revolve around the stack, not around the humans. Whatever your mental model of the stack, stackocentrism is still a better mental model than human-centrism.

If we had a proper map of the leviathan, every balance sheet in the world would show up as safe/burning, and the topology would reveal systemic risk. A financial fire department would descend and put out the fire, do control burns etc.

The public balance sheet would add an equity stake in the rescued org in proportion to the disproportionate benefit to the “owner.” The less you matter to system survival, the lower your priority, and the higher the stake taken in exchange for rescue if you do get rescued.

Bailouts are not a bad thing. We live with imperfect knowledge in an uncertain world, with complex patterns of risk coupling. We just need a science of bailouts. A financial equivalent of disaster preparedness and response capability. Instead of processing through a moral lens.

A stupid thing about human-centric thinking is that every failure becomes a moral failure and the calculus of blame, reward, punishment, and justice becomes the theology of system repair. One reason is we use money allocation (both market and planned) as primary fix mechanism.

It’s not a bad mechanism, but it has the unfortunate property of also being the primary enabler if individual human quality of life. It’s almost like we need different monetary systems for humans vs the system.

Otherwise it leads to thinking Bill Gates lives 120 billion times better than average burger-flipper simply because he has a 120 billion times the net worth of the median person with no assets. Most of that money is Stack fuel. He probably only is 10-1000x happier than you and me

Enterprise money vs consumer money? Not a bad idea actually. Things like food stamps get at that. As do things like earmarked capital equipment grants to industries. Separate power money from survival-and-hedonism money. Bread-and-circus bucks vs. infrastructure bucks.

Financialization would actually be a good thing if it included almost everybody in its logic, and encoded what everybody knows about the system. It’s currently terrible because it reflects a tiny minority view of how the world works. A bunch of 0.1% idiots trading green lumber.