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Fractal madness

The world in which we live has only the categorization that we apply to it. For this purpose, outlines are developed from all angles, which organize the various aspects. One problem thereby is the question, on what level we are and how many exist. In addition, the facts can be described with differently fine details. Interestingly, similar questions are asked on each level, e.g. what’s happening? How is everything connected? Who is involved? As soon as similar aspects appear again and again, this is called self-similarity or fractality. The triangle that consists of triangles, which consist of triangles, which consist of triangles and so forth. The fact that there is no end to the detailing has been proved by the mathematicians, for example, with the Mandelbrot set. The self-similarity is sometimes unsettling. This fractal madness is, however, better treated with a skillful classification by means of viewing levels.

Levels of detail always require a reference around which the levels are built. Let’s take our Milky Way as a reference point, then the surrounding universe is the macro, our Milky Way is the meso and our solar system is the micro level. The following bullet points describe these levels of detail, which are applicable for any magnitude.

  • Macro
    The macro level is always the coarsest view. It provides a general overview of the considered area. This level defines the entire scope of a system. At the same time it forms the basic structure for further refinements. Examples are the society as a whole, the earth with the continents, the value chain of a company with its essential functions and sequences. For further refinement, it is useful to completely describe the previously determined scope on this top level.
  • Meso
    The meso level successively spreads the elements of the macro plane across several levels, e.g. the continents into countries, landmarks, cities, quarters, streets, etc. On one level, the elements should be described with a similar degree of detail. The meso area consists of at least one level that is the bridge between the macro level and the micro level. Sometimes it may be necessary to build several levels. It should be kept in mind that the number of elements to be described multiplies with each level. Consider that each level consists of 5 elements; there are 5 elements on the first level, on the second level 5×5 = 25, on the third 5x5x5= 125 elements, etc. The purpose determines how deeply you detail. However, it is smart to resist the impulse to set up many levels, since the administrative effort increases exponentially – and ultimately kills any advantage.
  • Micro
    The micro level describes the lowest level of the model and offers the finest details. In addition, there are no further refinements. Thus, in a street, houses are found in which are apartments. In this case, there is no information about the number of rooms or the decoration or similar details of the apartments. Thus the micro level determines the barrier to further insights. If this granularity is determined beforehand, one can resist the pressure of further detailing. However, finer evaluations than those on the micro level are not possible.

Besides these levels of detail, there is a view from the outside. This abstract perspective of the whole describes all elements of the model, e.g. the micro, meso, and macro level as well as the properties, the relationships between the properties, and the logic for evaluation. The meta-layer floats above the content, which avoids self-reference and other model problems. The meta-level is always a part of the observation that facilitates the navigation in the system. Examples of meta-levels are standardized structures, e.g. society models (society, family, and individuals), economic models (markets, companies, and households) or business processes (value chain, processes, and activities).

Bottom line: Descriptions can be created in any granularity. In the interest of the processability of the content, the macro level provides an overview and outlines the overall system. The meso level arranges the large sub-areas and establishes the cohesion. On the micro level, the finest components are found. The starting point is freely selectable and is derived from the purpose of the observation. The fact that one can refine at any level, further and further, is sometimes confusing and leads to the pressure to describe an additional one, and another one – and just one other. However, this leads to frustration due to the ever-increasing effort for those, who have to create the further refinement. It is highly suggested to avoid the fractal madness of describing ever finer by resisting the impulse of the refinement and to simply perform the desired evaluations on the available levels.

Today’s system-relevant addictions

Shortly after the crash of the Wall Street in New York (1929) Bertolt Brecht found the right words in the Three penny Opera: “What is robbing a bank compared to founding one?” Thus, he demonstrated visionary instinct. Because of the government debt, every Germans have a calculated debt with the financial system of more than 29,000 €; every US citizen even more than $ 57,000 – inclusive all babies and retirees. At the same time, some people call the classical financial institutes as system-relevant and support therefore the banks. As a result, their losses are continuously socialized and profits privatized. With it the moment is reached to take a look at today’s grown system-relevant addictions.

Just as a drug dealer makes the junkie slowly addicted to the drug, the banks have built up over a long time the following system. The result is the same as in a casino – the bank always wins.

  • Pay little interest and take lots of interest
    Already the easy-to-understand idea of charging interest rates for lending money required early on the regulation of the money business in order to prevent usury – sometimes better, sometimes worse. At the same time the banks took over the service of securely storing the money that one did not need, paid for it a certain interest rate and lent the money for a higher interest rate to borrowers, who needed money. The differences created the profits of the bank. The management of this exchange is systemically relevant – the neutral broker creates more occasions.
  • Encourage consumption on tick
    Loans served to finance kingdoms, states, and eventually businesses. With the emergence of the consumer society, there discovered also the consumer loans: for housebuilding, car purchasing, and holiday trips and meanwhile for all areas of consumption. By enabling such loans, the banks encouraged the economy that in turn created jobs. This offer of consumer loans has system relevancy- at least in a world of consumption.
  • Fees on everything (account, credit cards, balance, transactions)
    In addition to the interest rates, the banks eventually discovered the approach of getting paid for any service. An overseas transfer has always cost a lot (additionally to the rate of the currency exchange). In the meantime, the banks start charging all areas: for all kinds of money cards as well as account, transfer fees inclusively for personal transfers at a bank counter. Particularly clever is the idea to offer customers a membership card that provides some of the old services for free – of course with some pre-requisites beneficial for the bank. Since regular payments (like the rent, the telephone bill, and loans) are transacted via the own bank account, the bank strengthens as a middleman its system relevancy.
  • Reduce and possibly eliminate cash
    Since banks offer less and less “physical” services, it becomes important to close the back door of an account, the cash. For this purpose it will be abolished successively. Without cash, the values only exist in the banks‘ data storages. Thus, after the abandonment of the gold standard, we reach the zenith of the virtualization of the financial values. Our wealth is now subject to fluctuating courses, which are constantly changing. So, if the cash itself has no more material value, you can also get rid of it. As soon as only the data storages of the banks represent our monetary possessions, the last person should be clear about the system relevancy of banks.
  • What is still to come?
    In the future, ALL money actions will be chargeable. The highest fees will be asked by those banks that can not change themselves as fast as the other players. The Internet enables new business models – from Linden Dollars, Bitcoins to microfinancing, crowdfunding or private loans. These transformations mean the end for classical financial institutes, which believe that they can finance themselves through excessive fees and do not adapt to the new circumstances. The last convulsions will demand a lot of the system. This means for the customers to find a way out of the systematically defined dependency from the banks – the account, the saving interests, the standing orders, the transfers, the money investments, etc. The insistence on the apparent system relevancy will shift the system – away from the classical financial institutions.

Bottom line: For millennia’s, the economy worked without system-relevant banks. Today, the banks are in a deadlock. The current efforts to find new income sources will exploit the meanwhile established dependencies, until the customers get broken. The credit system, the consumption, the services, the cash, and all that is called system-relevant, will be replaced by new providers with new business models, like microfinancing, crowdfunding or private loans. The basis of the economy, the money that is only based on faith, will be replaced by new means of payment – no matter how, main thing is getting out of the system-relevant addictions of today.