Oz Blog News Commentary

Open Loop Nation

January 25, 2017 - 05:50 -- Admin

The US, as a socio-economic system, is now running open loop.  

Not only that, it's running open loop in an extremely chaotic environment and that's bad news.  While open loop systems are extremely stable under controlled conditions, they can be just the opposite in complex, rapidly changing or uncertain environments.  In those environments they fail quickly or worse:  they run amok.    

What is open loop?  Open loop is a concept from control theory, but anybody who has ever worked with machines is already familiar with it.  

In a nutshell, an open loop system doesn't use a feedback loop to modify its performance, it simply runs at the level you set them at until you turn it off or it runs out of fuel.  A closed loop system is just the opposite.  It modifies its performance based on changing conditions.

For example, its the difference between a fire in your fireplace that burns until it's out of wood and a home heating system that turns on and off based on the temperature you set.  

So how does this apply to something as big and complex as the US?  

The US is a socioeconomic system.  We built it.  For the last hundred years it's been a closed system.  That means it:

  • has levers and mechanisms for adjusting its performance.
  • can measure its effectiveness relative to achieved results.  
  • can mitigate any damage or exploit opportunity when the environment or situation changes.  

However, those levers and mechanisms have frayed over the last couple of decades:

  • The levers and mechanisms of control the US has available to manager our socio-economic system are too weak to do so anymore.  From the Fed ZIRP to a chaotic media to porous borders to companies that avoid paying any taxes (Google, Apple, etc.).
  • There is no consensus over what constitutes success.  Who should benefit and how should they benefit?  Should we let the market dictate everything or allocate success based on identity or should we build a prosperous middle class?  
  • We've blundered into failures with security (9/11 to Iraq to ISIS), domestic development (rustbelt and Katrina response) to economic progress (the non-response to the financial crisis that we still haven't recovered from nearly a decade later).   

Now, there are forces at work in the US, driven by ubiquitous globalization and a rapid expansion in Internet social connectivity.  More importantly, from Trump's disruptive governance to a women's protest that was 3x bigger than any protest in US history, these new forces have exceed the ability of the US institutions to respond.  

What does this mean?  

The US doesn't have a control system anymore.  It's open loop.  


John Robb

PS:  There's a good article in the New Yorker on how many of the super rich on Wall Street and in Silicon Valley are now doomsday preppers.