Thoughts on National RESILIENCY

Featured image: Dominoes Falling, courtesy of https://www.flickr.com/photos/mwmbwls/ Creative Commons license grant CC BY-NC-SA 2.0

This started out as a draft of a note for Senator Mark Warner, one of the Democratic Party brain trust working on the 2020 campaign strategy. Thinking before the pandemic was that the campaign would focus on a return to normalcy. Post-pandemic, it is clear that many elements of national resiliency need a major overhaul.

Our government has suffered from two things, potentially related. First, one of our national political parties has been using a strategy of divide and conquer to keep power to itself for oligarchical purposes. This includes campaigns based on fear of them.

Second, our social programs were developed individually in this hostile environment to treat symptoms rather than in support of essential governmental and civic resiliency objectives.

At every point on our journey to our current resiliency system, one party waged a two pronged fear campaign — fear of communism or now socialism, whatever that is, and fear that they, people not like us, might get something that we didn’t or cause us harm more directly.

The resulting difficulty of passing coherent legislation has led to a patchwork of well-intentioned but buggy programs. This patchwork is full of gaps and special cases making it difficult for the patchwork to support maintenance of national resiliency and unable to support many of us whose occupations do not permit a secure standard of living. For these purposes, a secure standard of living includes safe housing, essential health care for chronic and acute diseases and trauma, retirement security, and economic during earned income interruptions.

This post makes the argument that we need to take a step back, change our policy from one of aiding individuals ad hoc to one of achieving a resilient government and society that can survive foreseeable challenges by aiding individuals in a holistic fashion. It is largely about keeping domino chains from topping.

Our Congress’s response to the 2020 COVID-19 outbreak has been largely ad hoc. In spite of Congress’s “best” efforts, it has largely missed the mark by slow delivery of ad hoc relief measures that treat individual economic effects of the pandemic. The economy is far too complex for such a strategy to be successful.

Rather relief needs to enter the economy at the same points from which economic activity originates and flow through the economic networks that service normal transactions. Where possible, relief should permit the individual transactions that would occur if isolation measures were not in place. Normal emergent flows would support most of the economy.

This article considers the characteristics that promote societal resilience. How we go about achieving these characteristics is a complex undertaking that will emerge a bit at a time. Much of what we need already exists but needs refinement and protection from schemers. But essential elements of individual and familial security require an overhaul and processes that now require legislative action need to become automatic.

References

To learn more, read about the work of Jay Forrester, a pioneering computer engineer still active as a teacher of operations research and dynamical modeling of non-physical systems.

https://en.wikipedia.org/wiki/Jay_Wright_Forrester

National government must achieve and maintain well-understood characteristics

To my way of thinking, our government has become a complex patchwork of ad hoc programs that treat symptoms rather than establishing the essential rules of the game and processes. Instead, we should aim at establishing stable processes that provide a safe and fruitful environment for individuals and business entities and protect the orderly origination of economic activity at its normal origins.

These characteristics are designed to provide an orderly environment for normal social and economic interation and to prevent economic collapse at the individual, local, state, and essential industry levels under challenge. They are aimed at preventing a cascading failure in the economy resulting from industry malpractice or natural challenges such as weather events and disease outbreaks. As much as possible, a good design aims to preserve orderly function of essential industries in the presence of aggregate disruption of individual circumstances. In the absence of a pandemic or other emergency, these same mechanisms allow those in lower income occupations a measure of resilience to work interruptions and periods of ill health.

The aim of these items is to establish a true national security by establishing and maintaining population resilience one resident or family at a time. Resilience is an emergent property. If the parts are resilient, the whole should also be resilient as normal activities can continue during the economic disruption. A resilient society would have the following characteristics.

A competent body politic having a deep seated belief that we are all in it together and that we help each other through our government, business, club, and individual actions.
A clear government architecture describing the duties, abilities, and limits or each level and component of government, citizens, and residents
Fair contract law
Fair trade conduct laws
Fair intellectual property law and straightforward licensing agreements
Reasonable limits on individual behavior consistent with individual safety, our foundation governing documents, and international law.
Simple, easily understood tax law free of special cases and engineered individual and industry advantages
Equal protection for all under the law
Economic and healthcare security for all
Maintenance of orderly supplies of essential materials like WHO essential medications and medical materials, and yes, loo roll and groceries.
Competent and fair interactions with other nation states
Competent health care for all residents
Competent child care and education for all who need it
Income support for all residents to ensure economic security. This recognizes that not all full time occupations pay a wage permitting individual or family security.
Uncoupling of health care security from one’s employment and income security.
Competent trade goods performance standards to promote safe products and production
Universal education through professional level
Competent first responders and public safety processes
Competent technical guidance and collective action through complex challenges be they natural disaster relief, epidemic and pandemic outbreaks, or anthropomorphic climate change.
Competent environmental stewardship requirements and practices by individuals and industries.
Competent scientific and medical research processes and timely introduction of new knowledge into practice.
Competent individual and family economic security processes that operate continuously and have funding in place to expand without action in response to changes in demand metrics.
Competent government budgets that are approximately in balance in the absence of exceptional challenges to resilience and government can freely borrow in response to security demand measures.

Economies and societies are emergent

Economies and societies are emergent. They exist as a result of the interactions between the individuals and entities of which they are comprised. We need to cultivate the understanding that life makes opportunities for more life. This is true in natural ecosystems and in our emergent trade-based economy. My consumption results in income opportunities for others throughout the distributed system that is our modern economy. The result is that there is more for us all to share.

Each of the economic transformations resulted in loss of some occupations, transformation of others, and emergence of new occupations. This is always happening as clans joined to form tribes and and specialization of occupation developed within tribes shifting from hunter-gatherer based economies to an agriculture based economy and then to a trade based economy.

We also saw this when we introduced Social Security retirement benefits that allow those of us whose occupations provided only limited opportunities for individual savings to have a measure of retirement income security. We also saw it with the introduction of Medicare which allowed most of our seniors access to the healthcare they need late in life and permitted a significant expansion in healthcare occupations. Healthcare is now about 1/8th of our economy and it is likely our largest industry.

Each of these transformations created opportunities for more trade and resulted in more for us to share through expanded trade within the economy.

Come as you are

The pandemic is a graphic lesson that national challenges are largely come as you are events. The nature of the challenge may be unknown or an anticipated challenge may appear with little warning. We may know that a particular type of challenge exists but not when the next instance will occur. The COVID-19 pandemic is an example. The last pandemic this virulent dates back to 1918’s Spanish Flu.

The mechanisms to cope with a pandemic or other economic upset must be in place and functioning as part of the day to day operation of the republic. There is not time to build a logistics network from scratch for even simple products like diagnostic swabs. It is not that the swab is a sophisticated thing or difficult to make but that the automated machines needed to make billions of them are bespoke products often designed by the swab maker’s mechanical engineers and made to order by an industrial machinery manufacturer. This machinery must be on hand and ready for service when the need arises with financial support to the company providing the idle surge production capability.

Lessons from the Pandemic

The pandemic shows us that prompt universal healthcare and timely medical research and development is important to identify and manage disease outbreaks as much as to treat the individual. Every resident regardless of citizenship status should receive infectious disease treatment, chronic disease treatment, and trauma care for the physical and economic health of the herd.

The pandemic shows us that we must have the supply arrangements in place to make essential medical supplies in quantities an order of magnitude or more larger than our normal needs. This may mean making more essential healthcare materials at home and supporting provision and maintenance of idle capacity.

We are not currently self-sufficient in the WHO essential medications, for example. We are importing generic drugs from India, China, and Israel among others that we could make here. Following the Puerto Rico hurricane, we faced a shortage of IV saline, now almost entirely sourced from the island because the folks who made it moved operations there to take advantage of tax subsidies offered in the territory.

Prosperity Trickles Through Operational Networks

The economy is a high order system composed of many industries, actors, and exchanges. The exchanges interconnect the actors and industries and provide the demand and income for the goods or services of a particular industry. Operations Research uses the concept of operational networks to model behavior of these complex non-physical systems that make up industrial systems and the economy as a whole. For example, a steam power plant needs off-site power to operate, fuel, steam generator grade water, cooling water, steam generator water chemistry control chemicals, trained operators, trained technicians, repair parts, and much more. These supplies are literally sourced from all over the world. Take away any of those essential materiel streams or the skilled operators and technicians and the plant will be forced to shut down.

The economy is a network of trust relationships

The economy runs on trust. Money is all about trust. Trade is all about trust. Damage that trust and our complex economic system collapses. People stop lending, purchases for inventory stop, and eventually, manufacturing of goods for sale stop.

Every day in the US, we literally make billions of economic decisions. Financial and construction decisions rely largely on trust between the parties aided by standards and norms for that kind of exchange. Take my home mortgage as an example.

I have a home.
I have a mortgage. My lender trusts that I’ll pay him back and gives me a favorable rate.
I trust that my loan contract is clear, complete, and fair to both parties. I largely rely on federal and state standards to make it so.
I pay my mortgage.
Landlords also have mortgages, property managers to pay, and maintenance to do just as I do.
My mortgage manager collects my payment and pays the bond holders who trusted that we as a group would meet our obligations to our lenders.
The bond holders receive and spend the coupon interest.
The bond holders eventually receive and reinvest the principle.

As tempting as it is to stiff the landlord during times of hardship, doing so in the large disrupts more than just the landlord. It has the potential to disrupt the entire lending process. And it is not just the Kushner Clan that get stuck. Many retirement funds and pension funds hold real estate investment trust bonds. So doing so may endanger some rich swells but it can also endanger our future individual and collective security.