Another Possible (Fundamental) Formalization of “An Inquiry into the Nature and Causes of the Wealth of Nations” (Generalizing the Kula Ring Conjecture)

The Neolithic Revolution or Neolithic Demographic Transition, sometimes called the Agricultural Revolution, was the wide-scale transition of many human cultures from a lifestyle of hunting and gathering to one of agriculture and settlement, allowing the ability to support an increasingly large population.[1] Archaeological data indicates that the domestication of various types of plants and animals evolved in separate locations worldwide, starting in the geological epoch of the Holocene[2] around 12,000 years ago.[3] It was the world’s first historically verifiable revolution in agriculture.
However, the Neolithic Revolution involved far more than the adoption of a limited set of food-producing techniques. During the next millennia it would transform the small and mobile groups of hunter-gatherers that had hitherto dominated human pre-history into sedentary (here meaning non-nomadic) societies based in built-up villages and towns. These societies radically modified their natural environment by means of specialized food-crop cultivation (e.g., irrigation and deforestation) which allowed extensive surplus food production. These developments provided the basis for densely populated settlements, specialization and division of labour, trading economies, the development of non-portable art and architecture, centralized administrations and political structures, hierarchical ideologies, depersonalized systems of knowledge (e.g., writing), and property ownership. Personal, land and private property ownership led to hierarchical society, class struggle and armies. The first full-blown manifestation of the entire Neolithic complex is seen in the Middle EasternSumerian cities (c. 5,500 BP), whose emergence also heralded the beginning of the Bronze Age.
The relationship of the above-mentioned Neolithic characteristics to the onset of agriculture, their sequence of emergence, and empirical relation to each other at various Neolithic sites remains the subject of academic debate, and varies from place to place, rather than being the outcome of universal laws of social evolution.[4][5]~http://en.wikipedia.org/wiki/Neolithic_Revolution

Nick Szabo makes what seems to this author to be a seamless and game changing (groundbreaking) formalization of Adam Smith’s works which ultimately bridges our understanding of economics with software:

Metcalfe’s Law states that a value of a network is proportional to the square of the number of its nodes.  In an area where good soils, mines, and forests are randomly distributed, the number of nodes valuable to an industrial economy is proportional to the area encompassed.  The number of such nodes that can be economically accessed is an inverse square of the cost per mile of transportation.  Combine this  with Metcalfe’s Law and we reach a dramatic but solid mathematical conclusion: the potential value of a land transportation network is the inverse fourth power of the cost of that transportation. A reduction in transportation costs in a trade network by a factor of two increases the potential value of that network by a factor of sixteen.
This formalizes Adam Smith’s observations: the division of labor (and thus value of an economy) increases with the extent of the market, and the extent of the market is heavily influenced by transportation costs (as he extensively discussed in his Wealth of Nations).

While society takes its time to realize and relevate the true power and implications of such an observation, we might take these new proposed economic teachings from Nick Szabo and head in the opposite direction to understand the fundamental causes behind what arises a “Wealthy Nation”.

The author proposes, a generalization of the Kula Ring conjecture, the fundamental cause of a wealthy nation with the following observations:

1) For humans to live, co-habitate, and create a thriving sustainable civilization, 3 (possibly) scare resources are needed: Food, Shelter from the environment, and Fresh water.
2) These 3 crucial resources can either be secured in a civilization’s own lands or bartered for.
3) Nick Szabo’s Kula Ring conjecture shows how money itself might arise from a coincidence of these (or other) wants.
4) The four color map theorem states: “…given any separation of a plane into contiguous regions, producing a figure called a map, no more than four colors are required to color the regions of the map so that no two adjacent regions have the same color.”
5) A Nash Equilibrium occurs when “…no player can benefit by changing strategies while the other players keep theirs unchanged, then the current set of strategy choices and the corresponding payoffs constitutes a Nash equilibrium.”

This suggests then on a plane/surface, such as the surface of our planet and in relation to the “nature and causes of “wealthy nations”, there is necessitated a minimum of 4 main distinct “resources” (food, shelter, fresh water, “money”) needed to create a Nash equilibrium for stability. For example (or in other words), if there was only 3 main resources there would always then be a competitor to offer at least one of the same resources as one of the other civilizations. If 5 or greater main resources were required it might not necessarily then be a Nash Equilibrium since such a market/trade equilibrium might “evolve” to only  needing 4 (thus destabilizing it).

Diagram showing the relation of the Kula Ring Conjecture to a generalized theory which might be used describe a 2-D land type scenario:

Fig1 above shows a simple and basic economy much like the Kula Ring conjecture by Szabo.  Fig 2 and Fig 3 show the different possibility that might arise as inflection points depending on how different circumstances might arise.  Fig 4 shows a complete transition to a land based division in which economies of different fashions might now arise depending on a more boundary and agricultural type expansion.

John Nash said in regards to money, “we may become irrational in thinking about it and fail to be able to reason about it like a about a technology…” and also that money is in some sense, “comparable to supplies of water, electric energy or telecommunications.” Both Szabo and Nash note the importance in transportation costs in regards to economies that emerge. Nash notes about possible stable value index’s:

… besides metal prices, transportation costs could play an important role in shaping such an index.

The bridge from evolution of our biology seems to be seamless and complete with our economic evolution and to software, the cosmos, and beyond.

 Quick Notes on the Fundamental Formalization of TWON

The Silk Road represents an early phenomenon of political and cultural integration due to inter-regional trade. In its heyday, it sustained an international culture that strung together groups as diverse as the Magyars, Armenians, and Chinese. The Silk Road reached its peak in the west during the time of the Byzantine Empire; in the Nile-Oxus section, from the Sassanid Empire period to the Il Khanate period; and in the sinitic zone from the Three Kingdoms period to the Yuan Dynasty period. Trade between East and West also developed across the Indian Ocean, between Alexandria in Egypt and Guangzhou in China. Persian Sassanid coins emerged as a means of currency, just as valuable as silk yarn and textiles.[42]~http://en.wikipedia.org/wiki/Silk_Road
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