Is the Economy a Controllable Process?

All Processes, Including the Economy, Are Controllable, but That Does Not Mean They Will Be Controlled

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Consequently, if we don't want the process of the global economy to become a batch one, the conversion to a steady-state control strategy is essential. A steady-state control model differs from Figure 1 because the manipulated variables themselves have to change. In other words, when the goal is stable and continuous operation, the algorithm must stabilize the population, convert to the recycling of resources and to the use of inexhaustible and free energy sources.

Béla Lipták

Q: Adapting the Control Model of the Economy

I would like to urge you to write down your thoughts on the economy rather earlier than later.I wish you'd be involved as a direct advisor to the President.

The sad reality is that here in North America not many engineers get into politics, compared to the European Union or Asia, and the heavy load of lawyers, as smart as they might be, don't sometimes do not understand the basic science that comes from an engineering education.

I often thought of the economy as a process. That's why I like following your writings on this subject.

Emanuel Bocancea, M.Sc., P.Eng.
CPC Canadian Operations Optimization

A: Recently, I have tried to consider the nonlinear nature of the process (the cultural and emotional characteristics of society) that tends to result in different responses to the same manipulation. I have also tried to consider the time constants (the time it takes for us to accept new ideas), the cultural dead times of individuals (once an individual formulates his or her views, change is unlikely until the next generation), and the gains (speed of response) of the human component of this control loop. I also considered the "batch time" (the time remaining until global demand exceeds the availability of resources) and compared this time to the time we have to stabilize the global economy by implementing a new multivariable envelope control algorithm.

To convert from the present runaway batch process to a continuous (stabilized) one requires the elimination of the "interactions" among the 200 control loops of individual nations and the acceptance of a cascade master controller that will "herd" the setpoints of all 200 nations during the transition from the present, unsustainable (batch) global economy into a stable and sustainable one. This process—the gradual evolution of a global government of sorts—is likely to be slower and even more difficult than the formation of nation-states Yet it is needed, and the algorithm suggests that the most time we have to do it is one century.

On one hand, controlling the global economy is no more difficult than controlling a slow, nonlinear, large-inertia and interactive industrial process. On the other hand, it is next to impossible because the manipulated variable (human behavior) is unpredictable and not always rational. Consequently, it is likely that the 200 slave controllers will not accept the setpoint from a global cascade master controller (even if it ever evolves) and will end up fighting each other over scarce resources.

Direct ANN control of the global economy can't be implemented until mankind understands and accepts the relationships between its actions and their consequences, and that may take generations. However, developing such a control algorithm is still desirable because it will show what will happen if we do not change.

Process control theory based on reliable ANN analysis clearly proves that the global economy can self-destruct if by the end of this century, an effective global institution (cascade master) is not allowed to evolve to control it. Today, we are only at the very beginning of this evolution, for two reasons: 1) because many nation states are unwilling to subordinate their interests to that of mankind; and 2) because most people do not yet understand that a gradual transition to a sustainable lifestyle is not an option, but a must.  
As such, we live in a dangerous age, because while both our economy and our communications are already globalized, neither is controlled because today the 200 nation-states are unwilling to subordinate their interests to global prerogatives. For these reasons, the ANN shown in Figure 1 is insufficient to control the economy.

I am preparing a new chapter for the next edition of the Instrument Engineer's Handbook dealing with the control of non-industrial processes. There I will publish a revised version of Figure 1. I hope that this algorithm will be able to control the transition from our present economy to a sustainable one.

My blunt language is not meant to fuel resignation and pessimism! Not at all! I am optimistic that the accumulated knowledge of process control professionals will make a great contribution to convert mankind's culture of unlimited growth to a stable one.

Béla Lipták

A: When I was a young engineer in the sixties (and engineering was a respected profession), I preferred dealing with machines to dealing with people. I could predict the behavior of a machine if I knew how it worked and could quantify its limitations, so I could get the machine to do what I wanted. I had no such understanding of people. Indeed, irrational behavior seems to be the norm and not the exception.

Therefore, I wonder how the economic loops might be closed. Suppose the growing scarcity of resources like oil, water, etc. could be controlled by reducing the number of people on the planet, but no politician or religious leader will call for population control, although the Chinese tried. So here is a loop that can't be closed.

The few people that have hoarded most of the money control most of the planet. As Amy Chua said in World on Fire, free markets allow a few people to buy up the markets, and democracy allows the best politicians to be bought by supporting their re-elections. There will be no scheme to control, never mind reduce, the population, because the hoarders depend on growth to fuel their need for more. Suppose algorithms showed that trading derivatives, credit default swaps, etc. are a great danger to the economy, and that what is needed is to downsize the traders and eliminate all of the laws that their purchased politicians have made to allow them to steal from the little people. What kind of actuator could do that?

Or suppose that an economic control algorithm determines that the cause of a high domestic unemployment is that corporations that create jobs now look outside our economy, forgetting the lessons of Henry Ford, who paid his workers enough so that they could buy his products. What could possibly bring that measurement back under control?

My wife, who listened to my brief description of a control loop in this context, decided that the actuator actualizes results. What good is it to solve the control algorithms if there is no way to actualize the means to move people?

Please tell me that you have some answers to these questions.

Bill Hawkins

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