Flying Automatons of War

Iran says is building copy of captured US drone
"There is almost no part hidden to us in this aircraft. We recovered part of the data that had been erased. There were many codes and characters. But we deciphered them by the grace of God.  


All operations carried out by the drone had been recorded in the memory of the aircraft, including maintenance and testing."



This terrible news is an unfortunate product of those who employed drones in the first place.  The ethics of Hiroshima and Nagasaki aside,  the original proliferators of the bomb are partially responsible for the dangerous flaunting of nuclear technology in Asia and Iran today.

Some think it is the US' right, privilege, interest and in fact our burdon to send unmanned automatons of war into the airspace of other nations. Proponents of drone use should realize that they are creating a new kind of world that they will not always control.  Drones are powerful weapons but the underlying technology behind drones is simple compared to computers and automated devices emerging in labs and companies worldwide.

It is an unquestioned tenant of American foreign policy that they US must maintain absolute control of the world.

Yet monomaniacal hegemony does not beget stability. Here it has produced unmanned terrors of the skys.  Perhaps Iran is lying about having functional drones. If they are honest, we can only that they will not does not employ this weapon in a fashion even more unimaginable than that of its creators.

Growing with the dream

Imagining Security in the landscape of the financial collapse

When the “American Dream” is evoked by its popular promoters, the concept implies a promise of security whose strength derives from the ingenuity of the people and a nation of opportunity. The American Dream is, in the familiar context, a notion that unifies the successful American entrepreneur with the immigrant, just off the boat, who might work for him. It is a sense of security based on fortitude of the collective American imagination. But in the context of contemporary American capitalism, the “American Dream” is not simply a security of the American ingenuity, but also an imagined security by which a group of 21^st Century bankers and politicians sold and bought a delusional confidence in the housing market. This imagined security was deliberately crafted by the managers of two of the largest economic institutions in the housing market - Fannie Mae and Freddie Mac – who used a creed of the American Dream to create a false sense of safety in packaged mortgage investments. These corporations were Government Sponsored Enterprises (GSEs), organizations that occupied an ambiguous position between public agency and private institution. Fannie and Freddie used this position to sell investments with what sounded like the backing of the Federal Government while simultaneously profiting from investment leverage in the same way as private bank.

Even though both institutions were officially made private by decree of Congress, investors had confidence that the government took such stake in their survival that it would never allow them to fail. This sense of security was imaginary because there was no law or contract by which the government was obligated to back the GSEs. Rather than guarantee the GSEs, politicians emphasized that the government had no responsibility to support the companies if they failed. The attitude of Congress towards Fannie and Freddie is evident in a speech by Congressman Barney Frank to the House Committee on Financial Services in 2003. The Chairman of the Committee, Frank maintained that while “investors take some comfort and want to lend them a little money and less interest rates, because they like this set of affiliations [with the government]…there is no guarantee, there is no explicit guarantee, there is no implicit guarantee, there is no wink-and-nod guarantee.”[1] But despite this lack of a government guarantee on loans from Fannie Mae and Freddie Mac, the two companies were able to use their associations with the government in order to take leveraged loans at interest rates far below those of the market.[2]

While federal officials did not want to be responsible for the potential of the GSEs to collapse, politicians did not want to distance themselves from the stated mission of the two companies either. Even though the companies were officially private institutions with their own economic interests, their managers maintained the rhetoric from their initial public incorporation. During the first decade of the 21^st Century the companies created an advertising campaign that associated the function of Fannie and Freddie with the success of “the American Dream.” According to company claims, it was the business of Fannie and Freddie to fund low-income housing. But the link between GSE policy and affordable housing was complex. The companies operated by buying existing mortgages from the banks that loaned directly to homeowners and reselling these mortgages as packaged investments on a secondary market. The claim was that this secondary demand would decrease the costs of lending directly to consumers and the market would offer affordable mortgages to those who would otherwise be unable to purchase a home. To sell these claims of a complex but noble economic function, the managers of Fannie and Freddie argued that their success depended on as the success of the American Dream. This moral argument served a crucial political function: since the published charter of the companies was in line with the agenda of many in power, politicians could not object to the ambiguous politics of the companies themselves.

While those in charge at Fannie and Freddie claimed that the corporations forged stability in the mortgage market, many observers argued that their practices threatened the stability of the economy as a whole. The GSEs functioned by purchasing low rated mortgages - those with a high risk of default - from primary lenders and repackaging these debts as ‘secure’ investments. But analysts worried that without support from the government, these packages were in reality only as secure as the GSEs themselves. Although politicians had good reason for concern about the operation of the GSEs, speaking out against Fannie and Freddie would have been perceived as speaking out against their most vulnerable constituents – those without easy access to housing. Though observers in the Federal Government often voiced concern about the direction of the GSE business model, Fannie and Freddie’s promise of poor income housing stopped in their tracks any attempts to clarify the misleading practice of false security.

Maintaining the support of politicians was not the only purpose of making claims to the American Dream. The true targets of the Fannie and Freddie’s advertising were investors who financed loans to the companies. The rhetoric of “growing with the American Dream” served to define the how investors in the mortgage market understood uncertainty and risk. The notion of economic security elicited by images of a secure and livable home was a means of convincing investors of the security found in lending money to the GSEs operations. Even though many observers noted that the GSE model was susceptible to speculation bubbles and collapse, the companies were able to counter their critics with the imaginative power of the American mythology.

The literature published by Fannie and Freddie is best considered to be propaganda. Using linguistic and visual devices, the companies’ annual reports attempted to convince its audience of an economic claim to security by eliciting the imagery of a cliché of social security. In one sense, company documents made an economic argument that the investments provided by the GREs would continue to grow throughout the decade. Some of the support for this claim appealed to a financial logic: the reports suggested that pressures of limited supply and increasing demand would continue to drive the value of existing homes ever upwards.[3] But going beyond such economic rational, the companies appealed to investors’ own sense of security by reminding them of their own homes. This type of argument by association is evident in the following paragraph that was printed in large letters that fill up a page in Fannie’s 2001 Annual Report:

“A house. The single most important purchase you’ll probably ever make. But the investment didn’t end with getting a mortgage and making those monthly payments. Making a house a home is a true American pastime. It’s become a weekend ritual right up there with Saturday afternoon soccer games and the Sunday Paper. It’s the Extra touch that the great wallpaper you finally found adds to the living room. It’s a load of mulch and fertilizer in the trunk of the car, and the hours devoted to getting the backyard to look like the outfield of Yankee Stadium on opening day. It’s the gas grill you and your son assembled out there on the deck…”[4]

Appealing to investor’s hopes and dreams as well as to their rational economic minds, this propaganda was a deliberate attempt to pit emotion against reason. With imagery of a warm and sunny home, the companies led their investors to take a sensation of safety for actual economic security.

Despite the imagery of the American Dream, those in charge of the GSEs ran the organizations not as advocates for low-income housing, but as companies seeking a profit. While they weaved an image of stability from the ideology of American living, the Officers of Fannie and Freddie were also cooking the books to exaggerate their success to potential investors. Both companies repeatedly over reported incomes and returns from 1998-2003, and Fannie did not even file an Annual Report in 2004 and 2005. These actions violated market regulations, but the infractions were excused by the Exchange Commission of the New York Stock Exchange in 2005. Without releasing the real data about their operations, the corporations systematically misled investors and stakeholders in the companies as well as the US Government.[5] These practices worked in the first half of the decade as speculators continued to drive up the value of existing homes. But when the market value of housing too far exceeded its true or equilibrium value, the real-estate bubble burst along with the imagined security dreamed by propagandists at Fannie and Freddie. False confidence in the GSEs contributed to the collapse of many private banks beginning with Bear Sterns in March 2008.[6] Ultimately, the turmoil in the housing market led to the complete collapse of both of the organizations in 2008. By that time, the GSEs owned 90% of subprime mortgages and 50% of the total mortgage market[7], and the government had no choice but to bail out the housing giants. In the end, the imagined security created by propaganda of the American Dream made Fannie and Freddie big enough that the false promise had to be backed up by real government action.

The story of Fannie and Freddie’s collapse is an illustrative account of how a group of American bankers sold a false sense of security by playing into the popular notion of the “American Dream.” But this particular failure of false confidence was only part of the larger Financial Collapse of 2008. While growing with the dream is a good demonstration of the type of economic behavior that caused the crash, the impact of Fannie and Freddie was not the only force driving toward ruin. The literature published by the companies in the first half of the Decade is amusing to read with knowledge of their collapse just a few years later. But ironic as this collapse of the American Dream might sound to the present observer, it is just one vignette in a larger comedy of economic history.

What the salesman at Fannie and Freddie did not account for in their appeal to the American Dream is that those who dream also have nightmares. An imagined security like that crafted by the GSEs can last only as long as everyone remains faithful to the fantasy. And when the confidence in a false security erodes, the imagination gives way to the most grotesque of fears. This is not a dilemma of financial technology. The problem is not simply the structure of capitalism, nor is it confined to the nature of man. Rather, the erosion of false confidence is an unavoidable consequence of an economic relation that dreams up securities, that imagines assurances and that fabricates a social foundation from the false hope of economic success. As long as men imagine economic well being and security, they will never escape events like the current financial collapse. Even though this story will soon be a “ghost of the past generations,” as long as we believe in a dreamed American security, such ghosts will forever “weigh like nightmares upon the brains of the living.”[8]

But making sense of the failure of these government sponsored enterprises, as well as the implosion of the economy as a whole, requires a theoretical understanding of how security and stability are established in a market society. By examining the literature of Fannie and Freddie in the context of their economic histories, we can understand how false promises were bought for years by investors, and why politicians ultimately went back on their promises and bailed the companies out of ruin. Through a dissection of the creed at Fannie and Freddie and an analysis of the bad dreams that led to the collapse of 2008, this study will elucidate the way that security is sold in a modern marketplace. By integrating this study in the literature of economic and political relations, we can conceive of how similar imagined securities might underlie our confidence not just in the economic system, but also in the security of the modern liberal state.

Although discussion of the current financial collapse has reignited critique of free market capitalism, making theoretical sense of the crisis requires a departure from the ordinary view of the market as primary and the government as secondary in the organization of society. Part of the reason that GSEs were able to dream up a false security was that the companies did not fit well into the typical notions of the free market and government regulation. This study will attempt to formulate a theory that can explain how false promises and securities propagate in the economic system, and why these promises are essential to in a market society. Although this study depicts imagined security as a threat to economic stability, is possible that the exercise will convince us that “dreaming” has a more central role in keeping society stable than the real social relation ever has.

---

[1] Barney Frank, Meeting of the House Committee on Financial Services, 2003.

[2] Helen Thompson, “The Political Origins of the Financial Crisis: The Domestic and International Politics of Fannie Mae and Freddie Mac” in The Political Quarterly, Vol. 80, No 1, 2009. Pg 17.

[3] Fannie Mae 2002 Annual Report. Available online at http://www.fanniemae.com/ir/annualreport/index.jhtml. Pg 13.

[4] Fannie Mae 2001 Annual Report. Available online at http://www.fanniemae.com/ir/annualreport/index.jhtml. Pg 12. Emphasis Maintained.

[5] Thompson, 18-19.

[6] Jeffrey Friedman, “A Crisis of Politics, Not Economics: Complexity, Ignorance and Policy Failure” in The Critical Review, Vol 21 No 2. 2009. Pg 142.

[7] Thompson, 18.

[8] Karl Marx “The Eighteenth Brumaire of Louis Bonaparte” 1852. Available online at http://www.marxists.org/archive/marx/works/1852/18th-brumaire/ch01.htm

Letter to a professor

Professor B - ,

Thanks for your wonderful reply.

No I did not think you were implying theoretical neuroscience was actually doomed. Indeed as "doomed" would be a pretty dreadful way to think about the subject that I think is one of the most important aspects of studying neuroscience. None the less considering the advance of Computational Neuroscience in relation to the advances of Theoretical Physics, and also as I suggested in class as in relation to Theoretical Economics is an interesting way to frame the study. I hope that my point was not too distracting to your lecture on Thursday, but I am always very intrigued by the philosophical framework that scientific fields occupy and what might be called the ideological framework within which scientific investigators and theoreticians see themselves as working.

It was from a discussion of theoretical physics that Thomas Kuhn derived the notion of 'paradigms' in the evolution of scientific ideas. The basic idea is that science does not advance along a steady path towards greater knowledge but rather moves in a stepwise fashion. Real advances occur as discrete leaps and bounds, they form discontinuities in our working knowledge of a subject.

I believe that the explanation of why scientific thought moves through paradigms includes the radical genius of thinkers like Newton Maxwell and Einstein but also includes sociological principles concerning the collective perception of the scientific society. In a way that is often not apparent to the individual researcher, the mode of inquiry - the questions that an investigator asks as well as the means and methods by which he or she goes about asking them - is the product of social relationships and societal structures.

It is by understanding the relationships between scientists, the interactions between scientific theory and scientific practice and also the way that scientists perceive their own inspirations and advances that we can really understand the sporadic nature of scientific advance. Thus understanding why the early 20th century saw such terrific success in physics and the late 20th century saw an impasse in the efforts to unify the field involves asking questions about the goals and aspirations of the physicists of each epoch.

In your lecture you correctly suggested that there are good reasons behind the intimate connections between the field of theoretical neuroscience and theoretical physics. The most obvious reason that the fields are connected is that so many brilliant physicist have made important contributions to theoretical neuroscience. These include the men you discussed below and also Leon Cooper who won a Nobel in physics before moving to Neuroscience at Brown. A second reason for the connection is that the mathematical tools developed in physics are also applicable to the study of neuroscience. The similarity of the math is itself an explanation for why a good physicist makes a good theoretical neuroscientist. If we compair the history of neuroscience with the history of physics, we are in the 21st century occupying the position in neuroscience that the ancient Greek natural philosophers occupied in physics. Seen in this light, the relationship of theoretical neuroscience to physics is like that of a big brother and reason for tremendous optimism.

My point is that there are other implications of the connection between physics and neuroscience. A first is that the kind of impasse that physics has encountered in recent years could also occur in theoretical neuroscience even though the field is currently advancing at a remarkable pace. Only in this limited sense might we say that neuroscience is doomed: it is 'doomed' to conform to the same stepwise evolution - leaps ahead followed by years of crawling at a snails speed.

A second implication can be seen by comparing the position of neuroscience in relation to physics with the position of economics in relation to physics. Just as the flow of scientists and mathematical methods makes neuroscientists see their field as physics little brother, economists have long tried to think of their field as emulating the study of physics. Appeals to physics can been seen in the works of economists throughout the history of the study. Adam Smith thought of himself as replicating Newton's Principia when he wrote The Wealth of Nations. Ricardo though of himself as a Natural Philosopher turned political economist. All of these classical liberal thinkers appealed to notions of gravitation in their discussion of economic equilibriums. Marx often used the language of chemistry and physics to describe the workings of the capitalist economy. Finally Keynes framed his famous The General Theory by comparing his work to Einstein's paper of the same title.

Similarly modern economists continue to try to think about their study by transferring the mathematics developed in physics over to their study of economics. This kind of effort is frequently very profitable, but there is also an important way in which it affects the way that economists see themselves as working and the way that they conceptualize the market itself. I think that some of the blame for events like the 2008 collapse can be placed in the inaccurate atomization and rationalization that is involved in the transformation of concepts from physics into thinking about economics.

If the case of economics, using the language of physics is frequently a means of disguising a thinkers actual motivation for making claims about the marketplace. Discussing employment in the terms of gravitation can become more than a metaphor - it can be a way of hiding or minimizing problems like unemployment and poverty.

These types on concerns are not present in the study of theoretical neuroscience. However, in the context of our discussion, the mode of inquiry in neuroscience can complicate the application of mathematical models developed in the context of physics. In an important way, all efforts in neuroscience are attempting to uncover the function of the material that we are studying and how the material's structure performs the function. This type of investigation is radially different from the study of a mere physical system - an ideal gas has properties but it does not have a function. In the example of facial recognition, the quality of recognizing faces is a functional quality of the cortex.

While the mathematical rigor of physics is an important tool in the study of neuroscience and is essential the continued advance of the field, it is important to recognize that the direct comparison of theoretical neuroscience with physics can be misleading as well. I would argue that trying to consider neural systems as no different from physical systems can obscure a true appreciation of the the biology even while mathematics is an essential tool in the study of the brain.

All this being said I cannot agree with you more about the importance of mathematical rigor in the advancement of neuroscience and I really look forward to your class this semester. Perhaps we can continue this conversation in a context less distracting.

Regards,

Jeff

Appendix # 1: Imagination in a Market Society

In a market society, things are first dreamt then they are produced sold and bought. That things are first dreamt is not obscure nor is it particular to the market organization. As thinking organisms, humans by their nature imagine the design of the objects and institutions they produce before they go about producing them. This first kind of imagination is simply the step of planning that we go through in the process of producing making the things around us. The act of planning out a physical form before going on to produce it is what many see as the characteristic that distinguishes human production from that of animals.[1] But while imagination might be one thing in the individual act of production, as soon as individual men step forth into society, their collective plans take on another form. In an economic setting, men first imagine and second produce a good or a service. But in the market economy, a more elusive act of imagination occurs when a good is made into a commodity - when it is bought and sold. To become a commodity, a good is prepared by the seller as an object that has value. To be bought as a commodity, the good and its promises are accepted by the masses as a valuable entity.

Sometimes the act of thinking about a commodity is as mundane as the promise that a farmer makes about the quality of his grain, or the value a supermarket customer sees in a familiar label on rice. In this type of a transaction, the promises made by a producer and accepted by a consumer concern the use value or utility of the good: the value obtained when the material is put to use or consumed. In the parlance of political economy, these mundane commodities might be defined as those for which use value sets an equilibrium value at which the good is exchanged.[2] Even the transaction of such mundane commodities already requires a complex process of collective thought so baffling that modern thinkers continue to describe it in terms of Adam Smith’s ‘invisible hand.’ Markets for commodities like grains and rice are mundane in that they are relatively well understood by microeconomic models of the costs of supply and the utility of demand. But despite the modern quantification of microeconomics, there remains beneath the theories a mystical quality even in the most simple of markets. Only a true cultural conundrum[3] could sustain an explanation as imaginative as Smith’s ‘invisible hand’ among the scientific aspirants of economics.[4]

Yet no real transaction ever takes place in a microeconomic marketplace. From the perspective of the modern economist, this realization stems from the view of quantitative microeconomics as a set of models that only approximate the real nature of economic phenomena. From the viewpoint of a political economist without the scientific aspirations of the modern economist, this same realization stems precisely from the impossible nature of the mythical ‘invisible hand.’ But for the purposes of this study, it is valuable to differentiate between those ‘mundane’ commodities, which are best considered microeconomic, from other more complicated commodities, which only a delusional scientist or a foolhardy philosopher would think of as mundane. This second type of commodity may be defined as one whose transaction is so dependent on the state of the economy as a whole that its values are nearly independent of the costs of production and the utility of consumption. Whereas cognitive planning is constitutive in the production of all physical things, and all commodities possess a certain mystical quality, it is in the transaction of these complex commodities that the economy comes to rely on the assurances of a distinct collective imagination.[5]

In the modern economy, the practice of investment is so routine that the purchase of stocks and bonds often takes on the language of consumption. In one sense, the notion of consumption is relevant even to commodities that will never be consumed: exchange value allows us to think about commodities as possessing an equivalent utility even if they have no material use. Investments have a finite monetary value set by risk and potential gain that can be transferred in the consumption of any other commodity in the market. Modern economists have developed a suite of theoretical mechanisms that quantify confidence and uncertainty in the same way that one might quantify the use value of a sack of rice. These tools are useful to professional economist because they allow him to speak about complex commodities with the same language as Gregory Mankiw when he describes the economics of guns and butter in Principles of Economics.

Since the actual value of an investment can arise only when it is exchanged for mundane goods with actual utility, we might call economists expectations about the value a statistical value: it is the result mathematical calculations that quantify each uncertainty to produce an estimation of the utility the investment can purchase. Although the calculation of a statistical value requires its own sort of imaginative process, mathematical logic gives endows the process of estimation with a certain confidence. But while the investment can stand on its own with a certain statistical value, when it is thought of in relation to all other investments its value melts into the collective imagination. Taken as a whole, confidence in the market value stands not upon real utility or mathematical rigor but drifts like a dream in society.

[1] This notion of the imagination implicit in the productive process comes from Marx’s Capital Volume 1, Chapter 7 Section 1: “A spider conducts operations that resemble those of a weaver, and a bee puts to shame many an architect in the construction of her cells. But what distinguishes the worst architect from the best of bees is this, that the architect raises his structure in imagination before he erects it in reality. At the end of every labor-process, we get a result that already existed in the imagination of the laborer at its commencement.” Available online at http://www.marxists.org/archive/ marx/works/1867-c1/ch07.htm

[2] Use value and exchange value have a long history in the various traditions of Political Economy. In this context, use value is in line with the 19^th century definitions of Marx or Ricardo and also 20^th century conceptions of utility.

[3] For an indulgence in the mystification of what I call mundane commodities, one need look no further than Marx’s essay on Commodity Fetishism in Capital Volume 1. However, as we will see later on in this section, Commodity Fetishism is really quite a different notion from that which I am developing in this piece.

[4] For the manifesto of the modern aspirant scientist, read Milton Friedman’s “The Methodology of Positive Economics,” in Essays in Positive Economics ed. Milton Friedman, 1953.

[5] While the distinction between mundane and complex commodities is made in order to develop a theory of imagined confidence, it is maintained as an arbitrary division. Any good can take on this second more abstract form because any market can be the subject of speculation. There is no such thing as the mundane commodity. However, the values of many commodities are dominated by the microeconomic forces of supply and demand and are only rarely subject to more abstract forces of speculation.

Capitalism's latest pastime - Waiting for your grandfather to die

They drove the plane into the ground last year, but America's Capitalists have found a new favorite game: buying up life insurance policies from the old and near death and betting that the policy holders will die. Reported in this article in the Times the main idea of this money making plan will be to offer those desperate and close to death a large sum of money for the rights to payoffs from life insurance when they die. Picture a team of Wall Street bankers standing around Grampa's bed, flipping coins and smoking cigars in their fancy suits, trying to convince your family its time to pull the plug and make good on their payoffs. If you were concerned that Capitalists were bored now that their party in the mortgage market has ended, this new game, backed up by the certainty of death, will alleviate your fears.

But despite the assurance of our mortal fate, this latest design is apparently no less risky - if infinity more morbid - than schemes of the past. Evidently the investors' bets will be threatened by the unfortunate occurrence that 1) improvements in health care and quality of life for the elderly will increase life spans and delay the flow of death money 2) discoveries in medicine will cure diseases like AIDS and Cancer allowing the investments to literally get up and walk away from the capitalist's greedy fingers 3) public health insurance will make people less desperate to exchange life insurance policies for cash up front because they will no longer need to dig up their savings in in order to afford health care.

But if you are afraid that these horrible series of events could sink the capitalists, then worry no further because the risks have spawned all kinds of new innovations:

The solution? A bond made up of life settlements would ideally have policies from people with a range of diseases — leukemia, lung cancer, heart disease, breast cancer, diabetes, Alzheimer’s. That is because if too many people with leukemia are in the securitization portfolio, and a cure is developed, the value of the bond would plummet.

Its great that the investors can spread the risks of their gamble among many routes to death and they can be sure that we will not cure all the worlds fatal diseases at once! Thank innovation of the free market because without the constant push for a new capitalist edge, we might just save the world.