Naturally Emergent Properties

Science sees naturally emergent properties, adding identity (and the knowledge of it) at the margin of existence. Over time, things converge and diverge to form a functional design, which is then said to have purpose although there is no need (nor evidence) to suggest intending the purpose.

Figuring the liability is the same way. A free market has emergent properties. Adam Smith and Karl Marx are classical economists who identified integral values (labor value, for example). Whether intended or not, the values emerge to form an added identity over time.

The term capitalism emerged to describe the exploitation of labor value in the formation of “The Capital.” Marx described it as an emergent property that, over time, will naturally converge with its natural identity, which is its labor value.

To resist the emergent property, capitalists say that without formation of the capital there would be no incentive to create jobs.

Jobs would not naturally emerge, capitalists say, without being driven by the formation of capital, which is a sacrifice made by laborers to increase the supply and cure shortages. Of course, like Marx said, this simply admits to the natural identity of the capital. It is naturally owned by labor and lent to the capitalists to be reinvested: to add supply and keep prices naturally low at full employment–not to be used against them.

Where the identity of labor and capital diverge is where there is an emergent property. Ayn Rand, for example, turned the exploitation description into a natural-law identity. The capital is owned by people that know how to get power and keep it. Capitalism is a way to do that and if we try to do it by administration of the state (Communism), she said, we will diverge from our natural identity (i.e., it will be unnatural). Not only will we simply have a new set of masters but they will be much less tolerant than capitalists who operate with an on-demand, free-market legitimacy.

The Randian Objectivist admits to the value of deconsolidated risk (ensuring a free-and-unconsolidated marketplace in priority like Smith said) but claim consolidation of the capital is its natural identity (an emergent property referred to as “efficient-markets theory”–operating with “natural monopolies” for risk protection). Technically, the philosophy is a lot of nonsense. Its useful value is to limit the liability of deliberately doing harm: reducing the harm done, and intending to do it, to the enduring presence of a natural law.

(Sorry to say that HRC buys into this natural philosophy of limited liability. Just like Randians say, all the financial stuff is way over the heads of most people and, naturally, the people who understand it emerge to manage it. Hands off! Let it be! The liability is naturally limited.)

Doing the dirty deed of deriving the derivative value, called the detriment, which is the fully assumed risk of loss, has to have an easy-to-understand interpretation, and essentially that is: it’s too hard to understand, so just leave it to the professionals.

What naturally emerges from the limited liability is a system for managing its interpretation, not actually limiting the liability. Regulatory authorities naturally emerge to rationalize the risk associated with doing the harm. The Fed, for example, tries to create the incentive to invest but does not say it is bad if it does not yield growth because, objectively, the market decides.

In any case, regulatory authority can be blamed for all the bad things that happen. When reducing the authority does not actually reduce the risk of doing harm (and the liability associated with it), then it’s a matter of trying to steal the capital from its rightful owners–the “makers”–by the “takers.” The naturally emergent, added identity (trying to control for the risk rather than directly force it with bureaucratic authority, which effectively reverses the rent associated with it) has the old interpretation. Nevertheless, the value is naturally emergent and always tends to its fundamental, integral value.

Resisting the naturally emergent property accumulates errors and the risk goes gamma, confirming (like Kant, and Saint Thomas Aquinas, said) the logic of a natural existence.

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About griffithlighton

musician-composer, artist, writer, philosopher and political economist (M.A.)
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