Vital Systems Security

Here is an interesting piece by a French theoretical physicist on how one might want to do security when it comes to the economic catastrophes. His starting point is no surprise: that neo-classical model of the markets do not make sense b/c they are not realistic. That is not how markets work…

Well, probably many of us would agree with him, but what makes this point not interesting is precisely “we” would also include the economists he blames. This is probably an important point to make, though not it is not an interesting one as far as positive knowledge goes: I am not sure if economists think in terms of classical Walrasian neo-classical market models of general equilibrium of supply and demand. It is true that economists will teach this in their undergraduate courses and will speak in these terms to the public or the politicians. Also probably policy advisors, technocrats, experts, and politicians find this language helpful because we are all familiar with it. But I do not think this is how they operate. I do not think they wake up and look at their screens and see if the market is in equilibrium or not. First of all, general equilibrium models left their place to partial equilibrium models. Second, with rational choice theory and other decision making models economists turned to new analytical techniques to analyze the economy since the 1950s. So, to me it seems that the language of market equilibrium is a heuristic discursive device for certain actors who are responsible for informing the public on the economy. This is however is not an unimportant task as we are right now seeing there is a huge gap between what actually these experts do and how they talk about what they do. One might argue that this is why the bailout failed, precisely because it was not a bailout but a rescue attempt to save the economy conceptualized as a vital system. It would also be interesting to think about how as the Fed was trying to manage the crisis what they called systemic risk and therefore rescued, and what they called moral hazard and how they let it sank. There seems to be a high level of imprecision and non-correspondence between the language and terminology of the Fed and what they do…

Second, if we actually come back to his interesting argument, we see that what he is proposing is not so far from the kinds of things we saw at OEP. His basic point is that we cannot rely  on these ideal typical models and rather we should ground our regulatory practices on a realistic model of science instead of a formal one. Given that he is a physicist it is not surprising that his solution is “simulate the market” as opposed to model it.  The funny thing with this proposition is that the two are not contradictory practices, but rather are mutually complementary. This is one of the interesting things with the experts who are in the business of simulation. Often times because they get their models from other experts already black-boxed, they forget that simulation rests on a diffuse network that includes both the theoreticians and applied scientists. Without models, i.e. a formalist scientific practice, simulations would not make any sense; it would simply be guess work. (We might want to think if there is a similar process in the case of catastrophe enactments and exercises that Andy, Stephen and others on this blog have been thinking about. In other words, how do we or rather the experts themselves know that we are basing our simulations on right kinds of scenarios? Are scenarios types of models in correspondence to the computer simulations?) 

Finally, the article gives us interesting clues on how simulation is used to govern the economy in comparison to the early attempts we saw at the OEP. He gives 3 examples:

1) An agent model being developed by the Yale economist John Geanakoplos, along with two physicists, Doyne Farmer and Stephan Thurner, looks at how the level of credit in a market can influence its overall stability.

2) Professor Westerhoff and colleagues have used agent models to build realistic markets on which they impose taxes of various kinds to see what happens.

3) Charles Macal and colleagues at Argonne National Laboratory in Illinois and aimed at providing a realistic simulation of the interacting entities in that state’s electricity market, as well as the electrical power grid. 

These can be interesting experiments to follow to see where practices of governing might go that are linked to the types of problems we would like to tackle on VSS…

I have a sense that there are a bunch of things we should be talking about, including developments in the Anthrax case.

But here just a quickie on Georgia. I happened across a chilling article — pasted in below — from a Russian news service. The article is an exhortation for the Russian army to go all the way into Georgia. Among many interesting and disturbing things, it calls for a strategic bombing campaign against Georgia:

“Obviously, entrenching Russia’s military presence in South Ossetia cannot be the goal of this war. A source from the SKVO told us: “We have to go all the way - destroy the runways at all airfields, including civilian airports - and all key railway nodes. Cut off Georgia’s supplies of gas, and its electricity supplies - with 70% of that coming from the Inguri power plant in Abkhazia. Make the ports at Poti and Batumi inoperable, along with the oil terminal at Supsa, and the railway lines to Azerbaijan and Turkey.”

The kicker? The model is the U.S. bombing campaign against Serbia:

“Ruslan Pukhov agrees: “The USA demonstrated in Yugoslavia what ought to be done in this kind of situation. It isn’t clear why television broadcasting and cell-phones are still functioning in Georgia. I hope Russia at least decides to establish a 10-15 kilometer buffer zone around South Ossetia, patrolled by infantry
as well as from the air.”"

Full article after the jump…

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Following news of the suicide of a leading suspect in the anthrax attacks Glenn Greenwald has a piece at Salon about the unanswered questions related to the incidents. Most significant among these concerns a rumor about an Iraq connection to the attacks, propagated by ABC news, which, Greenwald points out, significantly affected the mood in the months up to the decision to go to war with Iraq. As he notes, the most curious question is why it is that the media has not been more curious about an apparently persistent attempt to point the investigation toward Iraq.

One of the blog phenomena of this electoral cycle has been 538, a blog written by a statistician who uses simulation techniques to create predictive models for electoral outcomes. I haven’t looked into the details, but in their broad structure these models are similar to the simulations that we have been looking at from the 1960s on in the context of defense and emergency management. They incorporate a bunch of electoral and demographic data, and then run simulations using a randomizer (like a Monte Carlo simulation). Effectively, this randomizer produces a large number of different “worlds” — which are just outcomes of the simulator. Back in the day it took weeks to run one such simulation. But now, with massive computing power, every time new data comes in — in the form of new polls — they plug them in and run the simulation again. It is then possible to run standard statistical analyses on the outcomes of these simulations, essentially treating them like an archive of past events. If you check out the charts on the right side of the home page, you see an “electoral vote distribution” graph. This essentially shows the number of simulations that produced a given outcome in terms of electoral votes. From this you get some probabilities that a given candidate will win or lose, but also win or lose with different combinations of state-level outcomes.

In fact, this sort of thing is becoming increasingly routine. I have seen similar techniques applied, for example, to baseball statistics. (One particularly interesting example was an attempt to use simulations to figure out how likely it was that the record for consecutive games with a base hit would be tied or broken — the answer is fairly likely). And this is definitely the technique used in many formal catastrophe models.

Environment and Planning A has a new issue out with many articles about biosecurity, including one by Lyle Fearnley on Syndromic Surveillance that draws on work that is familiar to all of us. Here is a table of contents for the issue:

Issue 7

Commentary

Theme issue: Biosecurity: spaces, practices, and boundaries
Guest editors: Nick Bingham, Gareth Enticott, Steve Hinchliffe

Guest editorial

Securing life: the emerging practices of biosecurity 1534 – 1551
Steve Hinchliffe, Nick Bingham

Biosecurity after the event: risk politics and animal disease 1552 – 1567
Andrew Donaldson

The spaces of biosecurity: prescribing and negotiating solutions to bovine tuberculosis 1568 – 1582
Gareth Enticott

Safe from the wolf: biosecurity, biodiversity, and competing philosophies of nature 1583 – 1597
Henry Buller

Flexible boundaries in biosecurity: accommodating gorse in Aotearoa New Zealand 1598 – 1614
Kezia Barker

Signals come and go: syndromic surveillance and styles of biosecurity 1615 – 1632
Lyle Fearnley

Affect work and infected bodies: biosecurity in an age of emerging infectious disease 1633 – 1646
Claire Major

The practice of biosecurity in Canada: public health legal preparedness and Toronto’s SARS crisis 1647 – 1663
Estair Van Wagner

Here is an interesting piece from NY Times on some familiar issues we have been dealing with in the OEP research. 

The record storms and floods that swept through the Midwest last month struck at the heart of America’s corn region, drowning fields and dashing hopes of a bumper crop.

They also brought into sharp relief a new economic hazard. As America grows more reliant on corn for its fuel supply, it is becoming vulnerable to the many hazards that can damage crops, ranging from droughts to plagues to storms.

Apparently the price of ethanol went up by 19 percent in a month after the floods. The article goes on to construct a scenario that can take place once the share of biofuel in the overall supply of gasoline goes up to 20 percent:

Experts fear that a future crop failure could take so much fuel out of the market that it would send prices soaring at the pump. Eventually, the cost of filling Americans’ gas tanks could be influenced as much by hail in Iowa as by the bombing of an oil pipeline in Nigeria.

Just as in the case of OEP once again a catastrophic event (storm and flood) in a medium inherently governed by stochastic processes (the weather) problematized as a potential threat to the stability of the economy as a vulnerable system (eventually leads to the question of resilience again as we saw in the case of war mobilization and inflation problem by the early 70s under Nixon). As the article argues, introduction of biofuel leads to a new level of vulnerability:

Hurricanes Katrina and Rita interrupted a quarter of the nation’s oil production and closed dozens of refineries for weeks. Lines formed for the first time since the 1970s as gasoline spiked above $3 a gallon, a record at the time. The nation’s increasing dependence on crops for motor fuel adds another level of vulnerability from the weather.

I thought what is particularly interesting in this case is the opening up of a blockage as we pass a threshold with the emergence of biofuel. To my knowledge this is a very new development as corn, a conventional and critical source of food for populations is becoming a source of energy as the seemingly stable barrier between these two categories of vital domains are being linked for the first time as we demolished the barrier separating these two domains. Now we face with a new interface that is in need of being governed as one can even see in the concerns that IMF and World Bank have expressed their worries about this new phenomenon recently. 

It seems like at a technical level the first 3 generations of biofuels, there is nothing new about the process of transforming biomass into biofuel. It is a simple process of production of ethanol. However, what is interesting is that a company called Synthetic Genomics is is genetically engineering microorganisms to produce fuel directly from carbon dioxide on an industrial scale, which might be a possible solution to the problem of vulnerability mentioned above. I believe the founder of the company might be a familiar figure to those who are working on synthetic biology: Craig Venter, a member of the effort to map the human genome and the founder of The Institute for Genomic Research. An interesting convergence of VSS and Synthetic Biology and Nanotechnology blogs…

Here is a new and interesting article that engages some of the VSS work:

Increasingly, governmental responses to incalculable, but high-consequence, threats to life and security are framed by what has been described as the `precautionary principle’ (Ewald), `preparedness’ (Collier, Lakoff & Rabinow) or `pre-emption’ (Derrida). This article redescribes features common to these characterizations as the paradigm of prudence and examines how this approach to risk management is playing out in the context of fears that feature within the Australian political imaginary. We explore how the approach to the future entailed in the paradigm enframes `life’ and stifles democratic participation and innovation in ways of living. Three case studies (in biosecurity, bioecology and biomedicine) demonstrate not only how the paradigm pervades the government of everyday life, but also how it is challenged by human `agents’, material `life’ and the dynamic relations between these two. By formulating what this involves, we point to a concept of the political more conducive to democratic pluralism, diversity of life and innovative culture.

The New York Times has an article today that is worth a read on the distribution of Homeland Security Grants to states. The basic topics are pretty familiar, so it doesn’t bear saying too much about it (but read the full text after the jump). A couple notes that resonate with various work we have done in the past.

• As was true with civil defense, local officials are looking to find ways to use these funds to deal with problems that they face on a routine basis. So there are some interesting concepts emerging like “all-crimes” programs (a complement to all-hazards).

• There is a clear normative conflict — of the type that Lyle, Dale, and others have analyzed in public health-health security discussions, and that Andy and I summarize in the new biosecurity volume — between the way that central officials think about threats and the way that local officials do. Local officials here seem to have something like a classic cost-benefit approach in thinking about crime, as opposed to an orientation to catastrophic terrorism. No doubt, as is the case in public health, one could trace a tradition of approaching crime that emphasizes archival statistics and a “maximization” logic in the allocation of resources that comes into conflict with “existential threat” thinking.

• There is a concern with a creep in the mission. Typical: Catastrophic events keep not happening, so it is hard to stay focused on them. It is easier, notably, in a military in which all you *do* is think about such threats. But harder when you are a local agency spending 99% of your time on other things that seem more pressing, and that are now being starved for funds due to the downturn in local government revenues.

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In her recent book Just One Child, anthropologist Susan Greenhalgh traces the origins of China’s infamous ‘one child policy’ to a group of defense scientists who specialized in cybernetics and ‘control theory’. Her book is unabashedly both an analytic project and a criticism of the roots of the policy, that is to say, she begins from the claim that the ‘one child policy’ is an ethical bad and uses her analysis to discover what led to such unethical policy. Her claim that missile scientists were at the route of the policy, in other words, is a denunciation of a particular application of ‘natural science’ in government policy. First, I will tell a little bit of her story, which is incredibly interesting in its resonances with some of the topics we have been following in VSS. Then, I want to show how the perspective we have developed in the VSS research collaboration can productively engage as well as put in perspective her denunciation of cybernetic planning.
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The ongoing crisis in the housing market seems to illustrate how the economy can be thought of as a vital system and how that system and its governing can be conceptualized. The article points to how the labor market and the housing market can interact in unexpected ways and prevent markets to reach equilibrium.

The rapid decline in housing prices is distorting the normal workings of the American labor market. Mobility opens up job opportunities, allowing workers to go where they are most needed. When housing is not an obstacle, more than five million men and women, nearly 4 percent of the nation’s work force, move annually from one place to another — to a new job after a layoff, or to higher-paying work, or to the next rung in a career, often the goal of a corporate transfer. Or people seek, as in Dr. Morgan’s case, an escape from harsh northern winters.

Now that mobility is increasingly restricted. Unable to sell their homes easily and move on, tens of thousands of people like Mr. Kirkland and Dr. Morgan are making the labor force less flexible just as a weakening economy puts pressure on workers to move to wherever companies are still hiring.

In 2007, the inter-state migration dipped at a rate of 27 percent compared to last year, highest decrease in the rate of inter-state migration in the last 15 years! This seems to hint at the re-conceptualization of the economy as an open systems with interacting sub-systems and non-economic domains. In this new way of thinking, the problem of government becomes how to manage these interfaces where different series interact and influence each other. In the last post and in our conversations on the management of the economy, Stephen and I have been arguing for a transformation in the conceptualization of the economy as a vital system that needs to be governed accordingly rather than simply intervened upon. In this perspective, crisis is external to the exogenous to the system, rather than endogenous as Keynesian paradigm would argue. In the Keynesian paradigm, the crisis located at the natural life cycles of capitalism; due to the need for large scale re-investment at the end of each business cycle, the balance of savings and investment gets obscured and unless intervened the economy rather than coming back to the equilibrium point fails to restore the market equilibrium. So, the solution is proactive government intervention with the goal of prolonging the business cycle. The problem is located within the very nature of capitalism. However, as we have been seeing in the housing crisis the problem has nothing to do with fixed costs of re-investment of the business cycle. It rather has to do with the mismanagement of risk, which seems to be an agent of translation between different domains. It is a way to manage an interface, i.e the housing market, and indirectly the labor market, and people’s seemingly non-economic needs of inhabitation. As we have been seeing, miscalculation of risk is posing great vulnerabilities to the economy as a vital system, and the problem of crisis manifests itself in terms of shocks disseminating from one sub-system to an other. Then I presume the problem becomes one of resilience and robustness of the interfaces connecting different domains within the economy: the ability to absorb unexpected, and yet immanent shocks. So, can we actually understand the neoliberal language of regulation, as opposed to intervention, in terms of the management of interfaces? Probably Stephen can tell us more with regard to risk.