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Chasing the Wind

Chasing the Wind

Futility with Purpose

Plebeians generally ignore the tact of their economic central planners.  They care more that their meatloaf is hot and their suds are cold, than about any plans being hatched in the capital city.  Nonetheless, the central planners know an angry mob, with torches and pitchforks, are only a few empty bellies away.  Hence, they must always stay on point.

Watch for those pitchfork bearers – they can get real nasty and then heads often roll quite literally. [PT]

One of the central aims of central planners is to achieve effective public exhortation.  While they pursue futility, in practice.  They must do so with focus and purpose.

For example, economic reports with impressive tables and charts, including pie graphs, are important to maintaining the requisite public perception.  Central planners know that financial scientism must always be employed as early and often as possible.

Statistics, with per annum projections, particularly those that show increasing exports and decreasing imports, are critical to maintaining the proper narrative.  The USA’s embarrassing deficit in the balance of international payments will certainly diminish if it is sketched accordingly in an “official” report… right?

Yet the planners always disregard the simple observation that an economy is composed of countless, and variable, inputs.  How is a new discovery or technology, and its effect on investment and labor, to be anticipated and forecast?  How are the actions of 7 billion individuals to be modeled and displayed on a tidy diagram?

Good old Friedrich A. Hayek  – depicted above – once coined the term “scientism” to describe the futile attempts of assorted social engineers and their academic advisors to express human action in the form of barren mathematical equations and statistics. Lettuce look at something one of his followers, the late Professor Austin L. Hughes, wrote in an article published in the autumn 2012 issue of “The New Atlantis” journal: 

…click on the above link to read the rest of the article…

The Current Onset of Climate Tipping Points

The Current Onset of Climate Tipping Points

As extreme temperatures, the rate of sea ice melt, the collapse of Greenland glaciers, the thawing of Siberian and Canadian permafrost and increased evaporation in the Arctic drive cold snow storms into Europe and North America, and as hurricanes and wild fires affect tropical and semi-tropical parts of the globe, it is becoming clear Earth is entering a shift in state of the atmosphere-ocean system associated with destructive climate tipping points. As Arctic permafrost is thawing an analogy with geological methane-release events such as the 56 million years-old Paleocene-Eocene boundary thermal maximum (PETM) event is becoming more likely.

As is well known to students of the history of the climate, once a temperature threshold is breached, abrupt weather events ensue amplified by feedbacks such as decreased reflectivity of the Earth surface and enhanced release of greenhouse gases, often within short time frames.

Such abrupt changes are occurring at present. As mean global temperature has exceeded 1.2 degrees Celsius above 1880 temperatures (Figure 1), sharp reductions occur in Arctic sea ice from 45 percent in 1985 to 21 percent in 2017[i], when the ice cover was 8.5 percent lower than the average of 1981-2010[ii].

As the ice melts the near-total reflection (high albedo) of solar radiation from the ice is replaced by absorption of infrared radiation by open water; The flow of ice-melt water from the Greenland glaciers creates a large pool of cold water in the North Atlantic Ocean. The cold water region south of Greenland slows-down to aborts northward flow of the thermohaline Atlantic Meridional Ocean Circulation (AMOC), leading to cooling of the North Atlantic and adjacent North America and Europe[iii].

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Too Good For Too Long

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Too Good For Too Long

Over-extended systems contract quickly & violently
I’m writing this from my home in Sonoma County at the end of an intense week of witnessing firsthand the devastation caused by the many current fires burning in northern California. While it’s hard to focus on anything other than the moment-to-moment developments of this still-unfolding disaster (which I’ve been chronicling here), it’s already clear that the implications for my part of the state will last for many, many years to come.

It’s amazing how instantly the status quo where I live has changed. The world my neighbors and I lived in when we all went to bed on Sunday night simply no longer existed by the time we woke up on Monday morning. Lives have been lost. Entire neighborhoods — thousands of homes — have burned to the ground. Businesses, hospitals and schools are now shuttered.

Having now experienced this personally — on top of watching news reports over the previous weeks of similarly abrupt “before/after” transitions in Houston, Florida, Puerto Rico, Mexico City, Las Vegas and Catalonia — I have a new-found appreciation for the maxim that when it arrives, change happens quickly — usually much more quickly than folks ever imagined, catching the general public off-guard and unprepared.

We humans tend to think linearly and comparatively. In other words, we usually assume the near future will look a lot like the recent past. And it does much of the time.

But other times it doesn’t. And that’s where the danger lies.

The Cruel Math

In 1987 a Danish physicist named Per Bak released a landmark paper introducing the concept of self-organized criticality. Bak observed that complex systems draw stability through an ongoing cycle of corrective collapses that keep the overall system from becoming too over-extended.

…click on the above link to read the rest of the article…

Death to All Zombies!

Wait a minute. They’re already dead. Brexit just reveals that not everybody’s brains have been eaten. A viral contagion now threatens the zombified institutions of daily life, especially the workings of politics and finance. Just as zombies exist only in the collective imagination, so do these two principal activities of society operate mainly on trust, an ephemeral product of the hive-mind.

When things fall apart in stressed complex systems, they tend to fall apart fast. It’s called phase change. Too many things in 21st century life have depended on sheer trust that the people-in-charge know what they are doing. That trust has subsisted on the doling out of money-from-nothing: debt, reckless bond issuance. TARP, QEs, bailouts, bail-ins, Operation Twists, Ponzi schemes… the whole sad-ass armamentarium of banking necromancy. The politicians let it get out of hand. Things that can’t go on don’t, and now they won’t.

The politics of Great Britain are now falling apart landslide-style. Since just about everybody in or near power can be blamed for the national predicament, there’s nobody to turn to, at least not yet. The Labour party just acted out The Caine Mutiny, starring Jeremy Corbyn as Captain Queeg. The Tory Cameron gave three months notice without any plausible replacement in view. Now Cameron’s people are hinting in the media that they can just drag their feet on Brexit, that is, not do anything to enable it from actually happening for a while. Of course, that’s what the monkeyshines of banking and finance have done: postponed the inevitable reckoning with the realities of our time: growing resource scarcity, population overshoot, climate change, ecological holocaust, and the diminishing returns of technology.

…click on the above link to read the rest of the article…

Why we can’t understand global warming

Why we can’t understand global warming

An interesting excerpt from George’s Lakoff “Don’t Think of an Elephant!” 2014.

“Every language in the world has in its grammar a way to express direct causation. No language in the world has in its grammar a way to express systemic causation.

What’s the difference between direct and systemic causation?

From infanthood on we experience direct, simple causation. We see direct causation all around us: if we push a toy, it topples over; if our mother turns a knob on the oven, flames emerge. Picking up a glass of water and taking a drink is direct causation. Slicing bread is direct causation. Stealing your wallet is direct causation.

Any application or force to something or someone that produces an immediate change to that thing or person is direct causation: When causation is direct, the world cause is unproblematic. We learn direct causation automatically as children because that’s what we experience on a daily basis. Direct causation, and the control over our immediate environment that understanding it allows, is crucial in the life of every child. That’s why it shows up in the grammar of every language.

The same is not true for systemic causation. Systemic causation cannot be experienced directly. It has to be learned, its cases have to be studied, and repeated communication is necessary before it can be widely understood.

That’s right, no language in the world has a way in its grammar to express systemic causation. You drill a lot more oil, burn a lot more gas, put a lot more CO2 in the air, the earth’s atmosphere heats up, more moisture evaporates from the oceans yielding bigger storms in certain places and more drought and fires in other places, and yes, more cold and snow in still other places. The world ecology is a system – like the world economy and the human brain.

…click on the above link to read the rest of the article…

The Global Economy Could Fall Farther and Faster Than Pundits Expect

The Global Economy Could Fall Farther and Faster Than Pundits Expect

Systemic fragility doesn’t respond to central bank jawboning or Keynesian claptrap; unlike those “policy tools,” fragility is real.

The core narrative of central bank/cartel capitalism is centralized agencies have the power to limit downturns and extend credit-based “good times” almost indefinitely. The centralized power bag of tricks includes fiscal policies such as deficit spending to boost “aggregate demand” in downturns and monetary policies such as lowering interest rates to zero and buying assets, a.k.a. quantitative easing.

If we crawl under the barbed wire and escape the ideological Keynesian Concentration Camp, we find thinkers such as Ugo BardiJohn Michael Greer and Dimitry Orlov, whose work explores the dynamics of collapse, resilience and sustainability.

All three have added a great deal to my own (emerging) understanding of the many dynamics of collapse.

We can summarize the dynamics of collapse in many ways; here’s one: collapse is latent fragility manifesting. A familiar (and tragic) health analogy offers an example: a middle-aged man doesn’t appear ill, a bit thick around the middle perhaps, but neither he nor his intimates can see the fragility of his clogged arteries and blood-starved heart. Seemingly “out of the blue,” the man has a massive heart attack and passes from this Earth, to the shock of everyone who knew him.

Financial collapse isn’t “out of the blue,” any more than a heart attack is “out of the blue.” Actions and choices have consequences, and as resilience and redundancy are slowly stripped from complex systems, systemic fragility builds beneath the surface. At some difficult-to-predict point, a threshold is reached and the complex system fails.

In the financial realm, fragility builds as the system relies ever more heavily on marginal lenders, borrowers, buyers and investments for its “growth.”

…click on the above link to read the rest of the article…

A new blog dedicated to the Seneca Effect

A new blog dedicated to the Seneca Effect

 
The Seneca Trap is a repository of the posts dedicated to the “Seneca Effect” that appeared, and will appear, on “Cassandra’s Legacy

The idea of collapse is bad enough for most people when it deals with the running out of mineral resources along the symmetrical “bell shaped” Hubbert curve. But there is an extra dimension to collapse: it is the “Seneca Effect” (or “Seneca Trap”, or also “Seneca Cliff”) that notes how, most often, when things start going bad, they go bad fast – even very fast.

So,  a few years ago I started mulling over this idea, also as the result of a question that Dmitry Orlov had posed to me. I also remembered something that the ancient Roman Philosopher Seneca had written and that a friend of mine (Luca Mercalli) had pointed out to me. The result was the “Seneca Collapse model,” one of a series that I call “mind sized” simple models.

The basic idea of the Seneca Model, as I implemented it, is that a complex system, such as a whole civilization, does not collapse just because it runs out of resources, but also because of side effects related to the consumption of these resources, effects that we would call today “pollution”. Trapped in between depletion and pollution, the system collapses even faster. This is why I call the effect also the “Seneca Trap”.

After I had developed that first model, I discovered that the phenomenon may be more complex and that there are many real-world systems that can be considered as affected by the Seneca Trap. It can be applied, in particular, to fisheries. On the whole, it is a fascinating subject that I am still exploring.
…click on the above link to read the rest of the article…

Sociocultural Boundaries

Sociocultural Boundaries Header

Sociocultural Boundaries

Some years ago now a team of Swedish scientists proposed an interesting framework for understanding planetary environmental problems. It generated a range of responses from the environmental community, mostly positive. I had what is undoubtedly a very unusual response to their framework, and while it is perhaps old news, it may still be useful to present it here. As an anthropologist, I see planetary problems from a cultural and evolutionary perspective that could offer a different take on the subject.

Estimates of how the different control variables for seven planetary boundaries have changed from 1950 to present. The green shaded polygon represents the safe operating space. Source: Steffen et al. 2015
Estimates of how the different control variables for nine planetary boundaries have changed from 1950 to present. The green shaded polygon represents the safe operating space. Source: Steffen et al. 2015

First, though, I want to say that the identification of the nine interrelated environmental ‘boundaries’ has been unquestionably of great value (Planetary Boundaries). Raising awareness about the problems and emphasizing nonlinear feedbacks effects, and so the possible triggering of abrupt global environmental changes, are integral to a more sophisticated discussion of climate change and the other problems they highlight. To list them, they are climate change, ocean acidification, ozone depletion, nutrient fluxes, global freshwater use, land use change, biodiversity loss, aerosol loading, and chemical pollution.

SteffenExponential
The great acceleration of the Anthropocene. Source.

The nine ‘boundaries’ are concisely represented in their popular diagram. The green space in the center represents the safe operating values. If the wedge exceeds the green space then it has already crossed its threshold and become a threat of flipping to a disastrous state for our human presence on the planet. Worse, the problems are interrelated and interactions are a grave threat. As an example of dangerous interactions, loss of soil moisture, degradation of land to new land types, and biodiversity loss all reduce the ability of ecosystems to sequester CO2, and thus increase greenhouse effects.

…click on the above link to read the rest of the article…

The Permaculture City: Cities as Complex Systems

The Permaculture City: Cities as Complex Systems

The following sections are excerpted with permission from Chapter 1 of Toby Hemenway’s new book The Permaculture City, published by Chelsea Green.

When a permaculturist sees words such as “function” and “synergy,” it sets off lightbulbs in his or her head. Function, for example, indicates a relationship, a connection between two or more elements. A road functions to move traffic, thus the road has a relationship with vehicles, and it mediates the movement—that is, it makes connections—between the traffic, its origin, and its destination. Knowing a function, in turn, leads us to identify the items and processes necessary to fill that function and also points to the yields created when that function is filled. Thinking in terms of functions, then, is a powerful leverage point, because it identifies needs, yields, relationships, and goals, and it helps us spot blockages, missing elements, buildup of waste, and inefficiencies in the various flows and linkages that are part of that function’s workings.
This means that when we look at cities, their residents, and the other components of urban life in terms of their functions, we can spot the factors that influence how well they are able to perform those functions. Then we can study, understand, and direct those factors and influences in ways that will create and enhance the functions and properties of cities that are beneficial, such as community-building public plazas, parks, and structures; open and supportive marketplaces; and habitat-creating green space; as well as human elements such as responsive policy processes. We can also spot and damp down the negative factors. Once we’ve done this, the next step is to evaluate, to see how well our changes have moved us toward a more livable, and life-filled, environment. That is the heart of design.

…click on the above link to read the rest of the article…

 

 

China: Doomed If You Do, Doomed If You Don’t

China: Doomed If You Do, Doomed If You Don’t

Whichever option China chooses, it loses.

Many commentators have ably explained the double-bind the central banks of the world find themselves in. Doing more of what’s failed is, well, failing to generate the desired results, but doing nothing also presents risks.

China’s double-bind is especially instructive. While there an abundance of complexity in China’s financial system and economy, we can boil down China’sdoomed if you do, doomed if you don’t double-bind to this simple dilemma:

If China raises interest rates to support the RMB ( a.k.a. yuan) and stem the flood tide of capital leaving China, then China’s exports lose ground to competing nations with weaker currencies.

This is the downside of maintaining a peg to the U.S. dollar. The peg provides valuable stability and more or less guarantees competitive exports to the U.S., but it ties the yuan to the soaring dollar, which has made the yuan stronger simply as a consequence of the peg.

But if China pushes interest rates down and floods its economy with cheap credit, the tide of capital exiting China increases, as everyone attempts to escape the loss of purchasing power as the yuan is devalued.

This is the double-bind China finds itself in: weakening the yuan to shore up exports incentivizes capital flow out of China, forcing the central bank to torch reserves to mediate the flood tide of capital fleeing China.

But efforts to support the yuan crush exports based on a cheap currency, creating the potential for mass layoffs in sectors with razor-thin margins and convoluted black box financing. Nobody knows how many times the stuff in warehouses has been pledged as collateral, or how much debt is floating around the shadow banking system in China.

Forget the Fake Statistics: China Is a Tinderbox (August 10, 2015)

…click on the above link to read the rest of the article…

 

 

 

It Just Doesn’t Matter

It Just Doesn’t Matter

When an avalanche is about to descend upon you, does it really matter which snowflake was the penultimate cause?

While it’s interesting (in a mental masturbation kind of way) to debate the genesis of a pending market collapse, environmental chaos, or energy cliff, in the end, it really doesn’t matter–unless, of course, we are able to curtail the impending crises by correctly identifying the variable(s) involved and mitigating the consequences, but the likelihood of that outcome is looking increasingly unlikely as systems are prone to overshoot and collapse.

One of the ‘insights’ I’ve had over the past several months as I read the competing narratives that are floating about the globe and attempting to ‘explain’ why the dilemmas we are facing are happening is that we really don’t understand complex systems and the way they behave, so we are bound to cling to simple explanations that support our personal biases and reduce the cognitive dissonance that results when our belief system is challenged.

A large part of the problem, I believe, in discerning which variable(s) play(s) the most impactful role in creating a crisis is the tendency for various interest groups to spin the ‘facts’ to support their particular narrative.

For example, whether the cause of the oil/commodity price collapse is the role of central banks in manipulating the economic system, the limits to growth, overproduction (by Saudi Arabia? US shale? Canadian oil sands?), and/or economic contraction (global? Europe? China? emerging markets?), the result is a loss of thousands of jobs, domestic unrest, and increasing geopolitical tension as nations try to counter the deflationary collapse that appears to be resulting. Many Western politicians and journalists are pointing the finger at the production levels of the Middle East, particularly Saudi Arabia, and their ‘refusal’ to cut production, but data from the past decade shows that supply has increased significantly because of US shale and Canadian oil sands extraction rather than that of Saudi/ME. It strikes me that this ‘spin’ is simply a means of avoiding looking in the mirror and deflecting attention–blaming ‘others’ for our woes is a common means of reducing cognitive dissonance, focusing citizen outrage away from their ‘leaders’, and justifying particular actions/decisions.

In the end, however, the ’cause’ is not that important to the families crushed by a sudden loss of income. And that brings me to the conclusion of this little diatribe: being prepared for whatever comes our way is the only thing that might really matter. Whether at an individual, family, or local community level–I don’t believe it’s possible or prudent to worry much beyond these–being resilient and resourceful in the coming months/years is what is going to make a difference as to how ‘successful’ one can deal with the coming dilemmas.

Best of luck to everyone. I think we’re going to need it.

Steve


In the 1979 comedy, Meatballs, actor Bill Murray provides a ‘motivational’ speech to his fellow summer camp counsellors and campers who are getting soundly beaten in a ‘friendly’ competition by a neighbouring camp: https://www.youtube.com/watch?v=6UZvIZAHjlY. In the end, the speech is seen not as motivational but as a message that, in the bigger picture, the competition really doesn’t matter–(SPOILER ALERT) all the good-looking girls are going to go out with the other camp’s counsellors anyways because they have all the money!

Progress in an Uncertain World

Progress in an Uncertain World

Strong Towns is often accused of offering doom-and-gloom diagnoses of problems but being light on solutions. “You don’t tell us what we can actually DO to fix our insolvent cities,” goes the response. “You’re just so negative all the time.” This is not true, but I also don’t think it’s true that these criticisms are made in bad faith.

Rather, I think we have articulated a vision of what should be done to build Strong Towns, and done so in great detail. But that vision is heavy on experimentation and small-scale risk-taking (with potentially great rewards). It is heavy on civic engagement and grassroots action. And it is notably light on technocratic policy interventions: to the extent we talk about policy, it’s often about what policy makers should NOT do, not what they should.

There is a good reason for this, and those with a technocratic mindset (i.e. that the problems of cities will be fixed by top-down, data-driven policy tinkering) would do well to consider it.

The City as Ecosystem

Chuck occasionally has called mathematician and risk analyst Nassim Nicholas Taleb the “patron saint of Strong Towns thinking.” I strongly urge anyone who has not read Taleb to pick up his books—Antifragile if you’re only going to read one, but also Black Swan and Fooled by Randomness. They are deeply intellectual and cross-disciplinary, but not overly wonky: accessible and entertaining for non-academic readers.

The central thesis of Taleb’s work is that complex systems are inherently unpredictable and prone to “Black Swan” events: unforeseeable and unprecedented cataclysmic changes. It’s not that we haven’t figured out yet how to completely predict their behavior; it’s that it is far from even mathematically possible for us to do so. Think of a natural ecosystem. Global weather patterns. The stock market. The human body. A city.

…click on the above link to read the rest of the article…

 

Why is it So Hard for the West to See Everything is Connected?

Why is it So Hard for the West to See Everything is Connected?

capitalism-vs-socialism

QUESTION: Marty, you have written many times how everything is connected and how in Asian culture that is the foundation of all understanding. Why is it so hard in the West to comprehend this fundamental concept?

All the best

GD

ANSWER: I think it is all part of the idea that we can alter society forcing it to do as we desire. Politics is based upon this. Socialism is all about robbing one class to benefit the other. There is no comprehension that everything is connected and this permeates analysis as well. This is not my personal discovery for many have seen these connections in Eastern Philosophies. I think in economics, politicians are not interested in such realizations for it means they are not the masters of the universe.

You take Obama’s policy against Russia. He has effectively been disrupting everything around Europe and the consequences are pouring in refugees to Europe and his sanctions have hurt European farmers and the economy. It is not deliberate, but it is reckless for there is no recognition of how everything is connected.

Every action has a consequence. We have the Fed lowered rates to help the banks. But that crisis is over and the consequence has been to create the next crisis – the defaults of pensions and insurance companies that required high interest rates. So many regulations required pension funds to own government bonds. The regulations have set the stage for the next crisis.

We cannot escape this connectivity. Whatever action we take has a consequence. It is impossible to manipulate markets and the economy for there will always be unintended collateral damage. We are living in the era that will bring about a collapse of socialism precisely as took place in communism. Government is incapable of ever managing society for they cannot escape the inter-connectivity.

 

Wicked problems and wicked solutions: the case of the world’s food supply

Wicked problems and wicked solutions: the case of the world’s food supply

Can you think of something worse than a wicked problem? Yes, it is perfectly possible: it is a wicked solution. That is, a solution that not only does nothing to solve the problem, but, actually, worsens it. Unfortunately, if you work in system dynamics, you soon learn that most complex systems are not only wicked, but suffer from wicked solutions (see, e.g.here).

This said, let’s get to one of the most wicked problems I can think of: that of the world’s food supply. I’ll try to report here at least a little of what I learned at the recent conference on this subject, jointly held by FAO and the Italian Chapter of the System Dynamics Society. Two days of discussions held in Rome during a monster heat wave that put under heavy strain the air conditioning system of the conference room and made walking from there to one’s hotel a task comparable to walking on an alien planet: it brought the distinct feeling that you needed a refrigerated space suit. But it was worth being there.

First of all, should we define the world’s food supply a “problem”? Yes, if you note that about half of the world’s human population is undernourished; if not really starving. And of the remaining half, a large fraction is not nourished right, because obesity and type II diabetes are rampant diseases – they said at the conference that if the trend continues, half of the world’s population is going to suffer of diabetes. That’s truly impressive, if you think about that for a moment.

So, if we have a problem, is it really “wicked”? Yes, it is, in the sense that finding a good solution is extremely difficult and the results are often the opposite than those intended at the beginning. The food supply system is a devilishly complex system and it involves a series of cross linked subsystems interacting with each other.

…click on the above link to read the rest of the article…

 

Welcome to Blackswansville

Welcome to Blackswansville

While the folks clogging the US tattoo parlors may not have noticed, things are beginning to look a little World War one-ish out there. Except the current blossoming world conflict is being fought not with massed troops and tanks but with interest rates and repayment schedules. Germany now dawdles in reply to the gauntlet slammed down Sunday in the Greek referendum (hell) “no” vote. Germany’s immediate strategy, it appears, is to apply some good old fashioned Teutonic todesfurcht — let the Greeks simmer in their own juices for a few days while depositors suck the dwindling cash reserves from the banks and the grocery store shelves empty out. Then what?

Nobody knows. And anything can happen.

One thing we ought to know: both sides in the current skirmish are fighting reality. The Germans foolishly insist that the Greek’s meet their debt obligations. The German’s are just pissing into the wind on that one, a hazardous business for a nation of beer drinkers. The Greeks insist on living the 20th century deluxe industrial age lifestyle, complete with 24/7 electricity, cheap groceries, cushy office jobs, early retirement, and plenty of walking-around money. They’ll be lucky if they land back in the 1800s, comfort-wise.

The Greeks may not recognize this, but they are in the vanguard of a movement that is wrenching the techno-industrial nations back to much older, more local, and simpler living arrangements. The Euro, by contrast, represents the trend that is over: centralization and bigness. The big questions are whether the latter still has enough mojo left to drag out the transition process, and for how long, and how painfully.

…click on the above link to read the rest of the article…

 

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
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