By Lambert Strether of Corrente.
Recently, in “Control Fraud and For-Profit “Universities” (Et Tu, Bill Clinton?)” I took Bill Blacks formula for accounting control fraud, modified it, and showed how the modification could be used to describe the business practices of two for-profit universities,
The “Self-Licking Ice Cream Cone” Defined
The phrase “self-licking ice cream cone” was first used by S. Pete Worden, in the Proceedings of the 7th Cambridge Workshop on Cool stars, stellar systems, and the sun (!), 1992, who uses the Space Shuttle as an example:
“The Self-Licking Ice Cream Cone”
Since NASA effectively works for the most porkish part of Congress, it is not surprising that their programs are designed to maximize and perpetuate jobs programs in key Congressional districts. The Space Shuttle-Space Station is an outrageous example. Almost two-thirds of NASA’s budget is tied up in this self-licking program. The Shuttle is an unbelievably costly was to get to space at $1 billion a pop. The Space Station is a silly design. Yet, this Station is designed so it can only be built by the Shuttle and the Shuttle is the only way to construct the Station. Furthermore, the Shuttle has to be “improved” to support the Station with a new solid rocket motor which is to be built you guessed it in the District of the Chairman of the House Appropriations Committee. Since there are tens of thousands of jobs tied up in these programs and most of NASA’s budget as well, there is not only no money to get out of this endless do-loop, there are positive political pressures to make sure we don’t get out.
Ben Brody gives a useful definition and a second example in his article, “The definitive glossary of modern US military slang” (hat tip, Another Word for It):
A military doctrine or political process that appears to exist in order to justify its own existence[1], often producing irrelevant indicators of its own success. For example, continually releasing figures on the amount of Taliban weapons seized, as if there were a finite supply of such weapons. While seizing the weapons, soldiers raid Afghan villages, enraging the residents and legitimizing the Taliban’s cause.
Note that both writers begin with a sense of puzzlement and outrage: Self-Licking Ice Cream Cones (SLICCs) lack justification, by definition, yet exist. Now let’s take a moment to critique both Brody’s definition and Worden’s usage. (I know it seems churlish to critique the inventor of a term for his own usage of it, but the interests of science are paramount.)
Brody’s definition is both too broad and too shallow. It’s too broad, because what system — especially a political and/or economic system — does not appear to exist in order to justify its own existence? But it’s too shallow, since although Brody presents what I would call a correct fact set, he doesn’t make obvious conclusion explicit. He writes: “Soldiers raid Afghan villages, enraging the residents and legitimizing the Taliban’s cause,” but he doesn’t conclude that the raids are creating more Taliban (creating more raids (creating more Taliban (….)), in the iterative process Chalmers Johnson called blowback, and is in fact a feedback loop. However, Brody does notice the corrupt — not “irrelevant” — metrics[2] that instrument the system: At each turn round the loop, we capture more weapons, so we must be succeeding, right? (Brody also limits usage of the term to the military, which I do not propose to do.)
Worden’s usage includes the loop that Brody misses; he calls it, in good scientific FORTRAN style, a “do loop.” But Worden’s terminology is revealing, since a “do loop” is not necessarily a feedback loop, as Brody’s is. A system with feedback loops inserts its results back into itself; it’s recursive (like the negative feedback loop that connects a thermostat to a furnace, or the positive feedback of a squealing microphone or a Minskyian “deviation amplifying system”). Worden’s implicit definition, then, is also too broad and too shallow. Too broad (like Brody’s) because the world is full of systems that go round and round and round, stable, because of negative feedback, like my furnace (hopefully). And too shallow because, absent the notion of positive feedback, we can’t model the kind of feedback that can make a bad situation worse (and then worse (and then worse (….))).
So I would like to propose a different definition:
“Solutions” that amplify, to a rentier’s profit, the very “problem” they claim to solve.
This approach has the merit of including the feedback loop but making it positive (“amplify”), connoting false justification (via the irony quotes shrouding solutions, and problems, but including a metric — profit![3] — that’s far more appropriate than weapons counts or jobs, which are mere proxies for profit. In addition, I say “rentier”[4] since, again by definition, a SLICC is about business and not industry; hence the false justifications. A business model that sold bottled water to people after polluting their wells would be the mother of all SLICCs.
Ferguson as a Self-Licking Ice Cream Cones
The ills of the Ferguson law enforcement system are well-known[5], but let’s take a quick look at them through the SLICC frame. (Quartz has a fine article “by the numbers.”) NPR summarizes:
A new report released the week after 18-year old Michael Brown was shot and killed in Ferguson helps explain why. ArchCity Defenders, a St. Louis-area public defender group, says in its report that more than half the courts in St. Louis County engage in the “illegal and harmful practices” of charging high court fines and fees on nonviolent offenses like traffic violations — and then arresting people when they don’t pay. The report singles out courts in three communities, including Ferguson.
Last year, Ferguson collected $2.6 million in court fines and fees. It was the city’s second-biggest source of income of the $20 million it collected in revenues.
Earlier this year, in the series Guilty and Charged, NPR’s investigations unit found that the practices in Ferguson are common across the country. The series reported that nationwide, the costs of the justice system are billed increasingly to defendants and offenders, and that this creates harsher treatment of the poor. Because people with money can pay their hundreds or thousands of dollars in fines and fees right away, they are usually done with the court system.
People who can’t pay their fines and fees go on payment plans. But then there are extra fees, sometimes interest — 12 percent on felonies in Washington state — and, if poor people fall behind on payments, they may go to jail. Courts often ignore laws, Supreme Court rulings and protections that outlaw the equivalent of debtors prisons.
In Ferguson, Harvey says going to court creates more anger. The system, he says, favors people who can hire a lawyer. But poorer defendants simply take a guilty plea.
“And then if you can’t pay all the fines at once, they put you on a pay docket, and that just means [you] come to the court once a month and pay a certain dollar amount or explain why you haven’t paid,” Harvey says.
But the ticket may be in a far-away court that’s not easy to get to in a region with sometimes spotty public transportation. If someone doesn’t pay, a warrant can be issued for their arrest.
Jeff Smith, an assistant professor at the New School and a former Missouri state senator from St. Louis, says Ferguson “facilitates a debtors prison” because of the high number of arrest warrants that get issued when people don’t pay. When people go to jail, they sometimes lose their jobs.
“They get caught in this downward spiral, and it happens to a lot of people. This stuff accumulates,” he says.
“It’s a risk to go to the store,” says [Better Family Life CEO] “Outside of that community, it’s a risk to go to any educational institution, to get a job, to go for job interviews. Especially since most of the jobs are maybe 5 to 10 miles away. So some of them just don’t even try anymore.”
Morther Jones describes the same dynamic:
Court fines for minor infractions tend to snowball. For example, drivers accumulate points for speeding, rolling through stop signs, or driving without insurance. You can pay to wipe your record, which is pricey. If you can’t afford to, and rack up enough points, your license will be suspended and your insurance costs will probably jump. Need to get to work? If you’re caught driving with a suspended license, your court fines increase, you gain more points, and your suspension is lengthened. That’s how rolling through a stop sign could end up costing you your job, messing up your degree plans, and more.
So, the problem — or “problem” — is revenue, right? Well, no, not exactly. Emerson Electric is a corporation with $24 billion in revenue, and its property tax valuation is “rock bottom.” And the solution — or “solution” is turning law enforcement into a business, just Reaon’s Robert Poole advocated, right? How’s that working out?
And in the middle — between the “problem” and the “solution” — we’ve got the “amplification,” the positive feedback, where the “solution” makes the “problem” worse (the “snowball,” as Mother Jones calls it; the “downward spiral,” as NPR has it). I can see several:
1) The downward spiral of those arrested: They pay interest on their fines, and if they fail to make a payment, they’re arrested and imprisoned, from which they can escape only by making more payments;
2) The downward spiral of the community: People can’t risk “going to the store,” let alone getting a job or an education. Even leaving the human element aside, I can’t imagine that’s good for property and hence property taxes, or for sales taxes (which Ferguson apparently has).
3) The downward spiral of the municipality: And then, of course, there’s the Michael Brown shooting and subsequent events, which, again leaving the human element aside, can’t be good for revenues either (absent some future real estate development along West Florissant, and it would very interesting to know which insiders know which properties, if any, are up for that).
Given that Ferguson was turned by its local elites into a giant debtors prison with “law enforcement” transformed into a collection agency — and with the debtors disproportionately black — I don’t see how policymakers could have imagined that anything other than what happened, would happen. An explosion is often the outcome of a feedback system in runaway mode.
Oh, and the rentiers, and that pesky metric, profit. Forbes:
According to its 2014 Comprehensive Annual Financial Report (CAFR), the 21,000-person city has $25.9 million in total debt, or well over $1,000 per resident. About $3 million of this came from building an aquatic park; another $6.2 million is for tax increment financing bonds on a private mixed-use redevelopment project. The city also gave employees 6% raises that year, and like many others, grants defined-benefit pensions to retirees. … Money was spent on a boondoggle here and a subsidy there; employee pay raises were granted in an era of private sector wage stagnation; and the city spent over 5% of its $17.8 million budget on interest.
My point here is merely to show that Ferguson fits my definition of a SLICC — “to a rentier’s profit” — and not to quarrel with or justify the funding decisions of the Ferguson town government. That said, Emerson Electric is mysteriously absent from the Forbes discussion, and the “boondoggles” look like the sort of boondoggles any desperate small town makes, in the attempt to right itself; no worse than anywhere else. Moreover, the 2008 financial collapse is also mysteriously absent. Bloomberg:
Violent unrest that captured global attention is revealing Ferguson, Missouri, as a city still struggling to mend its finances more than five years after the end of the longest U.S. recession since the 1930s. .. Ferguson acknowledged in its budget last year that “the recovery has been extraordinarily slow” and it has struggled to collect revenue. After 2007, the city lost almost $1.5 million annually in sales taxes and hasn’t fully recovered, according to the document.
So, whatever a solution for Ferguson might be, we can be sure that the “solution” is not law enforcement for profit.
Conclusion and Exhortation
Readers, I wonder if you can give more examples of Self-Licking Ice Cream Cones? And more importantly, can you refine the definition? Are Accounting Control Fraud and Self-Licking Ice Cream Cones really commensurate?
Even more importantly, can you propose other plays? I think reverse engineering a playbook out of observed elite behavior would be very useful; we might be able to skate, as it were, where the hockey puck is going to be, instead of where it is.
NOTES
[1] Wikipedia’s definition is similar and has similar weaknesses, besides being even more teleological: “A self-perpetuating system that has no purpose other than to sustain itself.”
[2] Tarak Barkawi in Al Jazeera:
Neoliberalism, with its audit culture and fetish for short term quantitative indicators, is a mass production facility for self-licking cones. Everywhere bottom line measures of “efficiency” shape the activities of organisations and determine career advancement, selecting the kind of people and personalities who prosper in the system.
[3] The archetypal play — often cited during the dot.com era — could be South Park’s famous “Underpants Gnomes” (non-) business plan. Consider this a template:
The process, as explained by thee gnomes goes something like this.
Step 1. Collect underpants.
Step 2. ?????
Step 3. PROFIT
Of course, our elites tend to have a much firmer grasp on Step 2, and its substeps, than the Underpants Gnomes do; the Playbook is there to flesh that part out (besides substituting some good for the Gnomes’ primitive accumulation of underpants.
[4] Rentier: “[A] person living on income from property or investments.” Both of the examples I give below involve state action. Holders of government bonds are rentiers by definition, and benefit at least from municipal bonds in Ferguson, as well as from conflict investment.
[5] Marginal Revolution, to their credit, was strong on this issue: see “Ferguson and the Modern Debtor’s Prison.” However, it would have been nice to have some acknowledgement of how libertarians created the ideological justifications for the system whose outcomes they now decry.
[6] Autocoprophagous gets at the same idea, but as a word, it’s just too fancy. I myself would go so far as to define the creation of SLICCs as the very definition of corruption[6] — far more so than cash in a white envelope, or even a job for a family member.
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Col. John Boyd and his people noted ‘incestuous amplification’ about thirty+ years ago, which was a state to be inflicted upon the opponent to drive them to madness:
“Incestuous Amplification, in effect, hijacks the Orientation of decider’s OODA loop by overriding Observations to a point where his Orientation induces the Decider to see and Act on what he wants to see rather than what is.”
http://www.counterpunch.org/2008/09/10/can-obama-put-down-the-brie-and-opt-for-real-change/
That’s interesting. Can you give an example of “Incestudous Amplifaction” on a macro scale? (Actually, I’m thinking that this would be a useful framing for Yves’s idea that financial time is always faster than political time.
The group was called the ‘Fighter Mafia,’ and I’m sure they have examples of their own. Off the top of my head, I’d say the use of body counts, which during the Vietnam War began to be used as a primary index of success. Since the body count was high, the tactic of ‘search and destroy’ was elevated to a strategy, to the detriment of gaining and holding territory. The metric was flawed (I have read that on occasion oxen were considered VietCong), and the strategy meant the locals could never count on continuous protection.
My understanding is that drone strikes that kill children often count them as unfriendlies. So the metric has been selected as serving some purpose. “How To Win When You Lose” should be the title of a book on modern strategy in war, politics and business. Frank Rich wrote an article on Giuliani’s run for president, using Judith Regan’s testimony to spell out the ‘Fox News boosting Guiliani contributions boosting ads in Murdock outlets’ cycle in loving detail.
http://www.nytimes.com/2007/11/18/opinion/18rich.html
Follow-up concerning ‘financial time.’ The Flash Crash of 2010 has earmarks of incestuous amplification in a way that highlights a misunderstanding concerning Boyd’s points. The High-Frequency Traders had a faster response time which contributed to the positive feedback of the crash. Many then switched off and were net sellers. Traders with slower response times were never caught in the panic and had little effect. They were not caught in the disorienting sequence of events. Any HFT’s that helped trigger the crash, jumped off, and didn’t get back on the upswing were net losers in a situation they helped cause. Their maximized automation orientation had its own perverse consequence.
I am making a case for freeing time from the shackles of the denominator. Power isn’t how fast something gets done, it’s how long the effect lasts. Politics has a cycle time measured in years between elections. Seemingly negative effects between those points usually means increased income for the industry as a whole, since people make more contributions when they are convinced to care.
“Seemingly negative effects between those points usually means increased income for the industry as a whole, since people make more contributions when they are convinced to care.”
Not getting this. I need an example. Thanks!
(Also, I believe in Veblen’s distinction between business and industry.)
Maybe have to go with business, as most of what the political professionals seem to produce are ads and infotainment, along with polls and focus groups to determine the next round of talking points. That’s more like a sales wing than a production unit.
A concrete example is the Fox News – Giuliani connection. David Corn said Obama claimed “Fed by Fox News, they hear Obama is a Muslim 24/7.” Giuliani said last February that he “not believe that the president loves America.” (Quote from Fox News.) Giuliani has also said he is “absolutely open” to running in 2016. He won’t win, but the money train outlined in Rich’s article can still pull weight in the form of contributions from Fox News viewers who are genuinely afraid a Muslim mole is trying to wreck our country.
If some person can be induced to hate a political rival, they are more likely to make contributions which pay the salaries of those in the business of politics. This is at the root of the ‘lesser evil’ strategy that Democrats have hacking out since Reagan. When they are really desperate they start talking about how old the Supreme Court is.
What is the marginal return on incremental values of more or less evil? There was a time where the Democratic platform was anti-war. Now, we get to chose between the evil glint of ‘we came we saw he died’, juxtaposed by Sanders as a new ‘hopey changy’ guy who voted pro-war pretty much every time he could. He just doesn’t advertise it. But his being in the race produces emotional heat, and that’s more cash contributed to him and to Clinton.
A nice piece on the design problems with the space shuttle from 10 years ago…
http://www.idlewords.com/2005/08/a_rocket_to_nowhere.htm
Calvino’s “The Argentine Ant” short story is a nice metaphor for this issue. The village is overrun by ants, there is a government agency to address the problem, the agency’s solution is to administer honey to the ants…
At its heart, the idea seems to be about focusing on the minor aspects of a problem and ignoring the bigger picture – analyzing the mechanics of a situation in a reductive way, and committing a Fallacy of Composition – where you deliberately miss the point, miss the bigger picture, and continue pursuing a reductive ‘solution’ which just makes matters worse (but in way that’s advantageous to you).
So, it would seem that committing a fallacy of composition, is the necessary slight-of-hand for trying to justify actions like this – it seems like it is enough to grant plausible deniability as well, as reductive logic is still typically more than subtle enough to pass as plausible, even if it is (deliberately) flawed.
The war on drugs, terror, piracy, are all varieties of SLICC’s that take a reductive approach to attacking a problem – committing a fallacy of composition in the process – which worsen the effects of a problem (or keep the problem around, preventing it from being solved), and provide plausible backing for other end-goals (police state, mass invasion of privacy, Internet censorship) – with plenty of opportunities for profits in the process.
In a sense – you can consider most of micro-based (macro)economics, as providing the ultimate system of reductionist/fallacy-of-composition based justification, for a lot of SLICCs – the ultimate elite/fraudster playbook.
pretty much every federal agency, but notably the FBI, CIA, NSA, TSA, etc qualify.
if there were no terrorists, these guys would be forced to invent them.
And invent them they have! Many times.
About the only thing the Alphabets are good for are recruiting, arming, training and unleashing various “terrorists” and other just plain old dag-gone gawd-awful people. Very good at that. Also good at spying endlessly on 99s in USA (if not elsewhere), whilst studiously ignoring certain types of real threats, like Identity Theft. Real self-perpetuating cycles going on with these shiftless USG “employees.”
I’d say “after polluting their wells with a factory making plastic water bottles, for extra intra-article irony.
Other than this, a great practical introduction on non-linear dynamic systems. :)
Think it may be happening already with Nestle in CA. I often wonder where they make/buy their totally sh*tty grade plastic bottles used to siphon off water from drought-stricken CA to sell back to us rubes.
Selling California’s water out of state is definitely something that should be halted, but selling CA water to in-state residents in bottled form is not necessarily a bad thing in some instances. Such as mine for example. Communities in CA get their water from various sources. Many are clients of LA’s mammoth DWP. But others get their water from local wells, often operated by private water companies as public utilities. That’s the case where I live and let me tell you, our city’s water is awful. The joke is, “Our water is so hard you don’t have to be Christ to walk on it.” Forget the calcium and other minerals which build up on every fixture and faucet. The taste is atrocious. Awful. (I say this as a guy whose mother used to be horrified when I drank straight from the kitchen faucet or the garden hose.)
Prior to moving here 35+ years ago, the only time I used bottled water was when I was on an excursion or an outing of some sort. However, after my doctor informed me that I showed signs of dehydration that could cause cardiac issues, I went to drinking Nestle’s Arrowhead water. Funny thing is, having grown up in CA, until the recent news stories I still associated Arrowhead water with what it was originally — water from the springs around Lake Arrowhead. Now I find out that state-wide it is bottled from a wide number of mountain springs. (Maybe in SoCal it’s still from Arrowhead.)
Anyway, there are situation where, whatever the ills of bottled water might be, it’s still preferable to the alternative.
BTW, by law, every year the local water company has to send its customers a Water Quality Report showing how the trace elements in their water compare to state mandated standards. My report? Runs three pages, legal length, small print. We don’t get water from our local supplier, we get a witches’ brew.
You might want to look into a high quality water filtration system. Much better alternative. All my water I drink is machined water and it makes sense economically as well as not contributing to scumbag organizations Luke nestle.
Yes, it’s a better answer. Although the places where the water is without a doubt unsafe are more the farming areas, mostly the central valley. They’ve got whole cancer clusters there. The urban areas are *probably* safe if bad tasting.
SLICC -> Positive Feedback Loop -> Self destruction
All Positive feedback loops tend towards (mathematical term) self-destruction.
“Tend towards” = progress to in layman’s terms.
Yep.
The mother of all SLICC was ENRON.
Of course, one could argue that the very system we live in is a SLICC…
(But trust me, that ice cream cone is gonna melt along with the oil reserves… )
From my perspective, the entire USA is slowly, but surely, being turned into a giant SLICC for those in power.
There seems to be endless examples in every area you look. My recent move back to California has been an ongoing lesson of this. One example- my water company here charges $58 a month just to have an account with them- my water bill is only $58 if I use no water at all, other wise it’s usually an additional $30 or so for the actual water. This is outrageously expensive considering that I actually use very little water.
Too special to pay for infrastructure, huh? How American.
Monsanto.
Slathering a poison such as Round Up, to the tune of 1 pound per person per year onto fields, and the increasing resistance to Round Up by bugs, means that an ever increasing dose is required.
I would nominate the education deformers’ charter school promotion campaign, here described by David Sirota, as a nearly perfect SLICC:
http://www.salon.com/2011/09/12/reformmoney/
Please recall that a classic case of this self-licking ice cream cone was Leon Keyserling’s innovation, enshrined in NSC-68, of paying for the Cold War arms build-up by siphoning off a portion of the increment in national output that resulted from the spending for the arms build-up. The Cold War national security state paid for itself through stimulating economic growth!
Well, I’d say, globally speaking, that at this point the only guy who can really save Greece is Zorba. Or any of the rest of us nitwits.
A monetary system whose assets are public debt, paying interest to the holders of that debt, whose only real use for the asset is to loan it back to the public. At interest.
Aren’t the original Ponzi scheme and all such before (such as the South Sea Bubble) and after (such as unregulated derivatives), economic SLICCs?
Negative feedback loops cycle, but always revert back to an established stable point. All positive feedback loops result in a cataclysmic change, then a return to an equilibrium governed by a negative feedback loop, but centered round a new stable point, often very far from the point where the loop changed from negative to positive (for whatever reason).
Come to think of it, any economic system that incorporates/tolerates interest must become an SLICC.
The compounding of interest means that the pursuit of interest takes a larger and larger part of the economic activity, that is, it eventually subsumes and consumes the economic system. Interest must come from outside the system (the environment, the commons). Though it might not seem to be an SLICC at the start, or even the middle, it is obviously so at the end of the mega-ecnomic cycle–as we are experiencing today.
how about “amplify or continue“