#risk recursion

- other than environmental

(first published on alevemine.com on March 30, 2024)

Spoiler alert: What developing- and developed countries both need in order to survive is first and foremost: a visceral understanding of risk recursion. The risk that they have in common is that of a lack of adequate communication of this specific risk.

This risk isn’t yet relevant within developing countries, but it already is within developed countries. In other words, developing countries hold the key - the clarity - needed to make their own economies viable. But ironically, this involves saving the developed countries from the developed countries themselves, because the developed countries do not hold that key. Developing countries only have a brief window of opportunity to use that key, because very soon (not only I won’t be able to pursue this further otherwise, but also) they won’t understand what they currently understand anymore. Please read on for more on this.

In the elaboration below, I will often refer to or use concepts from the white paper https://doi.org/10.5281/zenodo.10633773 which defines the “margin problem” and the proposed approach to it: the international and global governance process of Resilience-to-Robustness Equilibrium “RRE”, which is unchanging with changes in tech, and involves the vector M as the measure of human - for lack of a word that doesn’t have an environmental connotation - sustainability, and the human functions, here called Resilience and Robustness Factors (“RRFs”). The resulting new economic framework is illustrated there with the graphic called “the oval”. This approach considers the entire human system and all risks at the same time. The rest of the document assumes that the reader has read said white paper, yet brings information for those who didn’t.

Recommendations:

For developing countries, bilateral negotiations display an unequal footing and multilateral negotiations should be preferred if the parties with weaker positions join forces into a team work. In negotiations of large scope, such as those in the framework of the Summit of the Future, more bargaining chips are on the table and parties in need may we willing to cut too deep into their flesh to obtain vital outcomes. Therefore, in such negotiations, a foregoing agreement on what should and should not be allowed in such agreements in today’s circumstances should be put in place. The requisites of RRE are those rules.

These requisites are: The preconditions for the maintenance of our ability to implement RRE; The upholding of our ten RRFs in the context of successive strategies in the light of scenarios, where much focus needs to go to the “non-sundering” function therein; The use of the vector M in context as the measure of sustainability; The new systemic thinking approach on which RRE is based. These rules should be applied to all decisions and structures, and should shape accounting, indicators, tax&pricing, tech use, R&D, institutional structures and more.

These requisites constitute a comprehensive agreement on just transaction where the exploitative or damaging character of each action or change on each factor touching people is addressed. This necessarily yields an as circular as possible economy and an appropriate treatment of sunk assets, and should be put in place as soon as possible and preferably before any other new agreements.

Certain soft skills should be fostered: Such as the ability to take conceptual or abstract reasoning as a basis for decisions, as such reasoning enhances the visibility of our complete system to decision makers; And such as the ability to accept and come to terms with the erroneousness of the own past decisions and harmfulness of the own past actions.

In multistakeholder, national and international consultations and deliberations, in-depth disclosures should be made available to all the involved, and one’s way of dealing with the items in these disclosures should be proactively communicated in relation to each subject of discussion. Indeed, sufficient separation of powers is not possible.

A coordinated and carefully planned transition to the fundamentally different economic system implied by RRE should be put into effect as soon as possible. The only alternatives are an uncoordinated transition with avoidable damage, and, without this transition, a continued exponential rise of premature risk and damage, in particular at the level of decision makers, until individual (including in current generations) or collective complete damage, depending on the point of view taken.

Pivotal Times

As of today, delegates of developing countries, with a certain potential of decision power at the global level, understand that something needs to change in the directionality of the current international and global governance for the sake of developing countries. Those whom I converse with tend to intuitively understand that RRE is a better way. In particular, it is not necessary for them to understand the risk recursion component (which says that any risk you’d transfer onto another container of the system would continue traveling across the system, transforming at each boundary, and come back to bite you) of the margin problem in order to come to a healthy conclusion.

This window of local clarity may nevertheless not last. While a vertical decolonisation is taking place and we are greatly focused on race and inclusion when thinking of any policy, a horizontal recolonisation is happening through the back door, leading to a situation where the affected will not have a delegate with influence in the governance scene. Such autocolonisation is also in question in developed economies, including the most advanced. As an example, let me cite the rerouting of damaged foods, without labelling them as such, to a low tier of produce or to food banks, in the name of food waste reduction. The levels of toxins in food that is rerouted in that manner appear not to be checked, at least by some players. We are currently signalling a seemingly green light to start exploiting one’s own, or, for that matter, anyone, as long as they are diverse. Thus the future developing country representatives with a certain potential of decision power, or a voice, might end up being ones who feel the same way as those with decision power today in developed countries. The catch is that these disregard the possibility that they would wake up tomorrow morning in a to-be-exploited or to-be-discarded social category, or, for lack of a reference frame, the possibility that this process would damage any members of their current categories, whereby members that are victims of damage may not be audible or visible, or the thought may be disturbing enough to be buried and avoided, or another solution may not be visible or graspable.

It becomes nearly impossible to make decision makers with sufficient power understand that they are harming themselves. Once the representatives of developing countries will be composed of such individuals, they, too, will need to get convinced of the significance, if not the very existence, of risk recursion, in order to want to implement RRE in the first place.

This means that we have very little time to change the system for the better.

Path Dependency

Today, governments are being hollowed out and international organisations are drying out. Governments are being dispossessed of financial wealth if not (yet) also of a public currency, through a myriad of vehicles such as blended finance, PPPs, grants immediately handed to the private sector by the receiving charities, and more, often labeled as having the purpose of de-risking or investment crowding-in. Governments are also largely being removed from operational power and dispossessed of intangible wealth and ever more of the access to and ownership of their resources and authority of all kinds: the identities of and access to their citizens and the services thereof, the access of their citizens to products and services, intangible social wealth such as the relationships and communication between and information of and on people, the shaping of curricula in education, infrastructure and procurement decisions and the returns of investments therein, military capabilities, ever more lawmaking and soon the executive (insurances with dynamic fees and autonomous weapons come to mind first), cadasters, underground resources and now nature itself. Governments are being bypassed by all means and using, via a process of socialisation, all manners of peri- and paranational actors that possibly can be leveraged. Private actors now often hold the operational power: they can or could “press the button”. These are concerning, because the private sector is not the party carrying the responsibility about citizens, or about people who are not in their value chains. (And because it likes to rush head first into the scaling of the use of new technologies, partly because development roughly takes place in production or by and tested on the consumers, partly because of investment rationale of the type “we disregard risks”, if I may make the comparison, just like we did when scaling the use of fossil fuels back in the day.)

The policies that move in that direction are shaped by entities with private stakes. No other entity out there and no NGO will propose an appropriate global governance solution because all are bound to or influenced by partial (as in not impartial) and/or private stakes, while the best solution can only be reached in a truly independent state, from a truly impartial, meaning truly encompassing, angle of view, via abstract thinking. OGI is an exception that provides an ephemeral chance to actually solve for humanity. This was made possible by the freeing of my meagre personal savings, built on a diverse experience of ways of thinking and ignited by my own visceral understanding of the significance of the margin problem. Such independence cannot last as the current system is designed in a way that makes this impossible in the long run. Therefore either parties will grab this fish while it is out of the water, or this option will disappear into the vast depths of the ocean just as it had appeared out of nowhere.

More on the state of Developing Countries

Developing countries face a worsening sovereign debt, exacerbated by the rise of rents to be paid for economic activity and built solutions. The upcoming tax negotiations at the UN and efforts to unlock all existing stores and types of currencies appear to be aiming to solve this problem. But this feeds right back into the points above about recolonisation and the hollowing of governments. Any supplemental tax that may soon be collected will flow right back to some investors through the mentioned financial vehicles. Humanitarian action itself is becoming a business that makes use of the crowding-in paradigm.

Developing countries have an unequal basis in the international affairs arena: the overwhelming activity exhausts (all) delegates and the countries or coalitions with the strongest influence, information and negotiation power are set to prevail.

A ruthless period of efforts by various stakeholders/parties to secure their access to resources in various countries and elsewhere is to be expected, especially with the energy transition which requires a plethora of critical raw materials (CRMs). In the process, the challenge of developing countries whose underground resources include such CRMs (or included coal) will be to obtain just transactions, respectively a just transition. Indeed, each transaction is a transition, and the RRE aims to systematise “justness” in all transactions.

Meanwhile, the Environment

In the backdrop such intense mining, with the ensuing environmental and human damage, competition leads to globally redundant and sensor- and actuator-rich infrastructure and equipment construction, raising CO2 emissions and pollution and disrupting ecosystems further.

Pricing as solution to sustainability merely displaces the access to consumption toward the richer. One may say there is only so much that a person can consume, no matter the wealth, but today, with automation, the sky is soon the limit. A single wealthy and authoritative person, in the absence of most other human population, would be able to draw in an immense consumption with the proxy of machines. This also means that the shrinking of population would not solve for environmental sustainability.

In Conclusion

The current economic system is not sustainable in itself and leads to a system that looks, seen from here, quite like a dystopia from all points of view. It is necessary to make decisive changes to our current directionality without any delay.