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Linux As a Model For a New Government?
An anonymous reader writes "The hedge fund investor who prided himself on achieving 1000% returns, Andrew Lahde, wrote a goodbye letter to mark his departure from the financial world. In it, he suggests people think about building a new government model, and his suggestion is to have someone like George Soros fund a new government that brings together the best and brightest minds in a manner where they're not tempted by bribery. In doing so, he refers to how Linux grows and competes with Microsoft. An open source government. How would such a system work, and could it succeed? How long before it became corrupt? Would it need a benevolent dictator (Linus vs. Soros)?"
In the history of the world, there has never been a "good" government. When things were at their absolute best, the government was mediocre and it didn't last.
The usual quote for this situation is Thomas Paine:
Society in every state is a blessing, but government, even in its best state, is but a necessary evil; in its worst state an intolerable one.
I am glad this hedge fund guy is moving to a purely theoretical field. If he can't learn from history, at least he can't hurt the economy with silly financial deals.
Actually, the lack of the ability to easily fork may be one of the most deeply ingrained flaws and problems with current political systems. It's a privilege largely reserved for corporations and/or the very rich, to easily change into and out of what political system you currently prefer.
It would be interesting to explore the options of more modular political systems where citizens, when they dislike their unit enough, could reasonably easily disengage and join another unit. A system could be designed on multiple dimensions ranging from geographic protection through healtcare through trade-related aspects, and comprise both low-level units up to world spanning organizations. If nothing else it might at least provide more interesting and intellectually challenging politics.
All "modern" government systems (democracy, communism, you name it), or in fact, all government systems until now, had one giant elephant of a problem sitting right there in the middle of the room:
There are humans governing others.
Now continue to read before you judge.
The problem behind this is, that those people have a conflict of interest, between the needs of the governed and their own interests. So the ideal leader would be someone, where those two match perfectly.... which is of course impossible. But you can approximate it.
The problem with this is, that we have no reliable way of selecting such a person. Mostly because normal people can be tricked pretty easily.
But there is one new solution, that just came up when computers and the Internet got available everywhere:
Do not use an humans, but a very simple mathematical model (one that is so simple that every educated human can check it for himself), that calculates descisions out of the votes of a model of cascading trust relationships. This sounds complicated but it's very simple. (If you know how CSS decides, what rules apply to a HTML element, you already know it.)
In reality, it would work like this:
There is a set of things, where a decision has to be taken. That set is defined by people having differences in these points. Now someone - the typical role, that a politician would fill today - can create decisions for that set. Then another one can say "I want what he wants.... but, i want this specific thing to be different". Of course someone can use the results of that as his base too. And you can combine partial sets too, as you like. For example, you could say "I'm a liberal, but I agree with person X on family matters and person Y on science matters. oh, and I want social skills to be taught in school."
That way you could form a nice set of your own views without voting for every shit out there. (Because, it should make your life better, not worse :)
Now of course, this does not mean that you can get everything you want... because you live in a community.
So you assign yourself to a community/communities (country, state, town) (those are cascading too, and you can define which one has priority over which), and your views will merge with those of the community, to create the rules for that group of people.
So a conflict of interest would not be possible, because you could change your set of rules at any time.
Now there would of course be one simple limitation: You have to be in the same group with people that you share resources (land, water, jobs) with, when it comes to that matter (land, water, jobs). This could be automatically solved via a GPS input (or something similar).
I think that would work great. You could even extensively test it in parallel to the current system, round out all problems, and if it works, you can simply let all people join that system by themselves, until the old government does not matter anymore and goes away. So there is also no need for a "transient" government, like in communism, which for some reason never seems to end its job of transition (again a conflict of interest).
This idea of mine is open and I do not care who implements it, as long as you do not create a slightly modified system that becomes evil, and still associate it with me!
Any sufficiently advanced intelligence is indistinguishable from stupidity.
Note: This is what really happened with the baht
Soros was also making contacts for a ceasefire deal through JP Morgan.
He was losing money on his short-term positions, which were not covered, but subsequently would make money on his medium-term positions. In general he was not in big trouble, unlike other speculators who had attacked the baht in the spot market and were trapped in the guillotine of the two-tier currency system. (The two-tier system made it impossible for speculators to attack the baht from offshore.)
Soros' position was largely medium-term, which would be matured in six months. That was the big chunk of the attack. Rerngchai realised that come August, the Bank of Thailand would not have the dollars on hand to deliver to the speculators, as obligated by the currency swaps.
But Soros also realised that the carry-over, or interest, cost of his baht positions would not be worthwhile due to the abnormally high interest rates on the baht.
Rerngchai reached a broad agreement with his aides that the Bank of Thailand would settle only half of its US$14.8 billion in offshore swap positions, which confronted the speculators face to face.
Paiboon Kittisrikangwarn, then the central bank's chief trader, received several phone calls from speculators through local banks asking for a truce. But his reaction was stern. He would not meet the speculators, but he agreed to cut a deal at an exchange rate of Bt23 to the dollar or the forward rate of 9 per cent.
"Take it or leave it," he said.
The speculators wanted Bt26, meaning that the deal would have left them with a loss of Bt3 for every dollar. The speculators were fuming with rage.
It was evident that strong political backup was necessary if this mission was to be successful. When Chavalit Yongchaiyudh, then prime minister, was informed about this plan to talk it out with Soros, Chavalit agreed.
His tone was conciliatory. "It's alright. Let's do it. I am ready to help," he said.
But the political situation at that time was highly precarious. Engaging in this kind of clandestine operation required a stable administration; otherwise, the slightest jab by the opposition could bring down the government. In the meantime, rumours of ceasefire negotiations with Soros quickly became widespread.
Euromoney wrote in its September 1997 issue: "Undeterred by the freeze, those who needed baht offshore to cover short positions became more inventive. One particular exposed speculator - local gossip-mongers reckon it was George Soros - went cap in hand to the central bank to ask for baht and offered to play the bank's game in return by easing off hammering the currency. The Bank of Thailand declined the offer."
In the end, negotiations with Soros would never take place because the finance minister lacked the political back up. Amnuay was about to fall victim to coalition politics, engineered by the Chat Pattana, which wanted to take over economic management from the New Aspiration Party.
In early June Arminio Fraga, a former deputy governor of the central bank of Brazil, who worked for Soros, contacted the Bank of Thailand to cut a deal. Fraga, who would be appointed his country's central bank governor a year later to save the Brazilian real, was then the managing director of Soros Fund Management.
Fraga, who frequently visited Bangkok to investigate the business climate, came over to talk about the possibility of ending the baht war.
But after Amnuay's resignation in late June, he sensed victory. When one of the central bank officials tried to call him to reach a settlement, he said: "I think we can wait a little bit more".
With that sentence ringing in his ear, Rerngchai realised that the Bank of Thailand was about to lose the currency war.