<nettime> FW: Scientists Discover Super-Dense Corporate Cluster

[Bruce Sterling <bruces@well.com>]

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From: "futurefeedforward" <fff@futurefeedforward.com>
Date: Sun, 01 Jul 2001 09:52:30 -0700
To: <bruces@well.com>
Subject: Scientists Discover Super-Dense Corporate Cluster



March 11, 2118

Scientists Discover Super-Dense Corporate Cluster

BOSTON--A team of scientists at the M.I.T. High-Velocity Monetary Object
Observatory announced on tuesday the discovery of a "super-dense corporate
cluster" localized in mid-town Manhattan.  The first structure of its kind
to be observed, the cluster raises profound questions about the relationship
between the physical and the economic worlds, and lends credence to the
controversial new discipline known colloquially as "quantum economics."
"Most great breakthroughs begin with great observations," notes M.I.T.
Assistant Professor Marguerite Fury, leader of the research team.  "And this
is a truly paradigm-shifting observation.  Physics and economics both just
got much more interesting."

    The cluster, dubbed AA-1, is a "binary system" consisting of two,
interrelated, capital-dense companies and a surrounding cloud of smaller,
lighter firms drawn to the two central giants.  AA-1 differs from other
large-scale corporate partnerships and joint ventures because the two giants
involved are linked through a peculiar ownership relationship known as a
"mobius control stitch."  Professor Fury explains:  "The two giants in AA-1,
AOL and Amalgamenture, each own majority stakes in the other.  AOL owns 52%
of Amalgamenture, and Amalgameture owns more than 60% of AOL.  This sort of
thing happens occasionally in the course of hostile takeover and defense
maneuvers, but usually resolves itself relatively quickly.  The AA-1 stitch,
though, has persisted for more than 40 years, largely because of the
unprecedented size of the two linked companies."

    The "stitch" linking the two companies creates a "control paradox."
"The cluster is characterized both by a management surplus and a management
deficit," explains Professor Fury.  "There are too many managers for the
interlocked firms, which should be one firm with one management team. At the
same time, there are too few managers.  The board of directors of each
company leads the companies separately, but nobody leads them together.
This paradox creates an oscillating control vacuum that sucks in,
alternately, firms that are control weak and control strong.  The cloud
surrounding the stitched giants is thus saturated with merger and spin-off
transactions."

    In addition to attracting the swarm of merging and spinning corporations
that compose the cluster's characteristic cloud, AA-1 is also responsible
for "spontaneous transaction pair production" attributed to a "large
magnitude debt/equity density differential" between the two giants at the
focus of the cluster.  According to the team, the two giants belong to
different "classes."  AOL is a conventional multi-national, characterized by
globally disbursed operations, large employee base, and significant current
assets and free cashflow.  Amalgamature, in contrast, is a "super-leveraged
holding firm," with significant free cashflow, but debt orders of magnitude
greater than equity and with nominal staff and a single Manhattan office.

    Professor Fury elaborates:  "The density differential at the heart of
AA-1 generates an asymmetric transaction space in which independent
transaction processes form.  This sort of formation happens all the time in
regular clusters, but the two sides of the transaction collapse into a
single process almost instantaneously.  In AA-1, for the first time, we've
been able to observe buyons and sellons before they collapse into a
transaction, giving us new and invaluable insight into the way transactions
form."

    According to the M.I.T. team, AA-1 is a unique system, at least for now.
"We're very lucky that our discipline is gaining steam at just about the
same time that complex monetary objects like AA-1 are forming," notes
Professor Fury,  "but AA-1 is just the beginning.  We anticipate that the
next hundred years will see capital formations that dwarf AA-1 and produce
wondrous effects we can't yet imagine."

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