The centrifugal governor

What went wrong in the UK banking crisis of 2008?  According to George Osbourne it was a catataxis – although he does not use that word. The confusion of roles between the Bank of England and the FSA meant that a key role was not being done properly: macro prudential regulation. The Bank of England’s remit was to keep inflation under control. They were responsible for setting interest rates so that inflation would not breach 3%. The Bank of England was looking at the big picture. The only trouble is it was the wrong picture . The FSA was busy regulating the City on a micro level, making sure that no one broke the rules. They were examining each financial firm in turn, going through a checklist to make sure that procedures were being properly followed. The FSA was the micro regulator but where was the macro regulator? This function fell between the two stools. Both organisations were interpreting their remit too narrowly.  Rules were being applied but at the wrong level: this is catataxis. There needs to be someone who will lock up the drinks cabinet just as the party is getting good. According to George Osbourne’s proposed reforms, there needs a to be a regulator but at the macro level. Thats why he is abolishing the FSA and replacing it with a new body.

We have been here before. Back at the dawn of the industrial revolution James Watt invented a device to make steam engines run more smoothly. It was called  a centrifugal governor.  Two balls rotating around a spindle. The faster the spindle rotates, the further out the balls get flung. But the further out the balls are, the more work it takes to rotate the spindle which will therefore slow the system down. A big flywheel with a lot of inertia will smooth out an erratically firing engine.  But this is a dynamic flywheel: the distribution of the weight changes with speed. Its damping down the acceleration. In other words, it is regulating the second derivative. It is macro prudential regulation. Having led the world in the steam age, maybe the new reforms will help Britain’s global competitiveness in the financial age.

A centrifugal governor

The myrmecologists debate

Adam Tofilski studies ants. In particular, he is interested in Forelius pusillus, a Brazilian ant. He spends three years videotaping a sandy patch of dirt at the edge of a sugar cane field at Fazenda Aretuzina in Brazil. Such dedication deserves a reward, and in this case it pays off. He finds something extraordinary. Some ants are deliberately sacrificing themselves for the sake of their colleagues. Ants forage in the daytime but at dusk they return to their nest. As they go back into the hole, they deposit sand particles around the entrance. This make a flat eliptical pile of sand, partially sealing the nest.  A few ants are left outside to kick sand from this pile over the entrance to disguise it. These few are left stranded outside the colony and die of cold in the night. Greater love hath no ant than to lay down its life for a friend.

Dr. Tofilski from Krakow University in Poland publishes his paper in “The American Naturalist” in Nov 2008. He rightly points out that other insects show sacrificial behaviour. Bees leave their stinging barb in the flesh of attackers and then die. Some termites rupture their abdomens to release a sticky fluid that entangles enemies. But these suicidal defences are only used when the nest is under attack. The Brazillian ant, Forelius Pusillus, is sacrificing himself preemptively to close the entrance of the nest each evening. Even without an enemy present, they are laying down their lives to die outside in the cold. It sounds as noble as Captain Scott of the Antarctic.

Ants are social insects, related to wasps and bees. Ant societies have a division of labour, communicate amongst individuals and have an ability to solve complex problems collectively. It is these similarities to to human societies that make them so fascinating to the myrmecologists who study them. There are over 12,000 species of ant. They have colonised every part of the Earth and are arguably the most successful creature on it. They account for 20% of the total weight of all land animals.  But the most fascinating thing about them is this: they are so social that no one is sure whether to classify the individual ant or the whole colony as the key organism.

Its easy to see a colony of ants as a creature in its own right: a super-organism. Ants have specialised roles such as workers, soldiers, foragers, drones and fertile queens. This division of labour means that the ants are working for the good of the colony. They are doing what the super-organism wants. The colony as a whole exhibits a form of intelligence and is able to do things that the individuals can’t. It behaves like a living creature: it moves, it metabolises, it grows and reproduces. With the army ants of South America, the colony itself is constantly on the move through the jungle attacking large prey en masse. When the colony gets too big, it “reproduces” by splitting in two. Leafcutter ants have four different castes of workers producing food in an elaborate chain. Leaves are cut, cleaned and fed to a special fungus that grows in gardens in their nests. The ants eat the fungus not the leaves. This is a super-organism with a complex digestive system.

Let’s shift perspective and view the colony as the organism rather than the ant. What then shall we make of Forelius pusillus, the Brazilian ant? It is no longer a poignant story of self sacrifice. They are just a few disposable cells sloughed off by the organism. Its a bit like exfoliating with a pumice stone in the bath. Do you shed a tear when you pull out your nail scissors? Do you feel sorry for the clippings when you throw them away? Its not really suicide…