Termite Mounds and Finance

Kevin Cox
3 min readJul 5, 2022


Termite mounds are an emergent property of simple algorithms termites evolved to follow. Other termites have different algorithms, and the mounds do not appear.

Large piles of Capital are an emergent property of algorithms human communities have evolved to build wealth. Communities can change the wealth-building algorithms to increase the rate at which Capital accumulates and spread the Capital more evenly across society.

The Termite Algorithm

Termites wander looking for pebbles. When they find one, they pick it up and continue wandering until they find another lying on the ground. They drop the pebble they are carrying and wander off looking for another pebble. They pick up another pebble if it is not part of a pile. The result of this pebble picking up and dropping over hundreds if not thousands of years by millions of termites are large piles of pebbles built into mounds. The termites have other algorithms to work on the piles to create tunnels and distinctive shapes. However, there is no master plan or instructions, just a set of simple activities that termites have arrived at by natural selection.

Capital Algorithm

Human economic activity is similar. People look around for places where they can buy things. The businesses where they purchase items are built with Capital. Capital can be thought of as the knowledge of creating the things and the assets used to create the products people buy. The price includes a charge for the knowledge and the assets. People pay for the knowledge but do not receive any knowledge or assets in the business as they stay with the seller. We can simulate an economy with these simple rules, and unsurprisingly we find it rapidly creates mounds of Capital.

Mounds of Capital accumulate knowledge but only need a certain amount to build products, so the Capital needs to move elsewhere to create more value. Capital Markets move money, and we have invented loans to take unused Capital to produce more without using existing Capital.

Governments try to stop these bubbles (mounds) from forming and to spread the Capital more evenly through society with taxes and social security.

An Algorithm Change to Reduce the Formation of Large Mounds of Capital.

It is challenging to run a business without creating Capital via profits. It is hard because businesses always need extra Capital to maintain their knowledge base of Capital.

A more productive economy is one with smaller piles that, in total, are greater than the large unproductive piles. In the productive economy, money moves quickly and is invested in new knowledge to reduce the cost of products.

We can make a more efficient economy by changing the algorithm. When a person buys something, they receive the goods and half the value of Capital included in the price. It speeds up the transfer of Capital across society, reducing the piles of stationary money and removing the cost of Capital Markets.

One way to do this is with Consumer (Public) Capital. Public Capital will halve the cost of knowledge (Capital) accumulation.

Buyers who acquire Capital can group together in small affinity groups. The affinity groups depend on the Capital and the product, and moving Capital within an affinity group is zero-cost. Community-owned batteries will likely be electricity consumers on the same voltage distribution line. For housing, they may be members of a profession or work in the same industry.

Governance and Public Capital

Public Capital distributes wealth across a community. It also distributes power across the community. The power is fragmented across different products, locations and groups. The cost of moving Capital is near zero, while using equity and loans costs as much or more than the Capital moved. Finally, the distribution and fragmentation of wealth and power make for a more stable, wealthier, innovative and inclusive society. Such a society costs a lot less to operate.



Kevin Cox

Kevin works on empowering individuals within local communities to rid the economy of unearned income by profiting from savings nor increasing prices.