Complex World

Complexity, emergence, self-organization, evolution — these are all related ideas that have been written and read about pretty extensively in the last few years.  They’re good and valuable ideas, and I’m glad we’re doing a better job now of using them in our thinking.  The idea that order and structure can emerge and organize based on a few basic thermodynamical laws and the inherent properties of the basic building blocks of that structure and the environment they exist in, is very powerful.  And it’s very sensible.

I’ve encountered two very different types of mindsets that restrict the applicability of these ideas to what I’ll call “favored spaces” of understanding.  I believe both groups are wrong to do so.

1. The first group, less common amongst the intelligentsia, is that human institutions and endeavors such as free markets are self-organizing, but that natural ones are not.  Members of this group are inclined toward small-government conservatism and libertarianism.  At the same time, they’re mostly Christians or other religious.  They look at the stunning simplicity and beauty of a complex natural world, and conclude that only a Great Being could have put it in such a spectacular ordering as what they are admiring.  That Great Being, of course, is God.
2. The second group is somewhat the opposite.  These are academics and professional thinkers of a variety of trades.  They look out into the world and see evolutionary and emergent processes at work.  They see a world without a director, or at least without need of one.  At the same time, they turn to fields of human endeavor, and are perfectly content to deny these principles.  Free markets cannot self-organize, individual liberties must be restricted to maintain a social order and prevent chaos.  They look at the monumental institutions of mankind, and conclude that only a Great Being could maintain and advance such a spectacular ordering of human endeavor.  That Great Being, of course, is Them.

So why am I talking about all this?  I recently read an article in the Boston Globe, Too Complex to Exist:

It may be true, in fact, that complex networks such as financial systems face an inescapable trade-off – between size and efficiency on one hand, and global stability on the other. Once they have been assembled, in other words, globally interconnected and integrated financial networks just may be too complex to prevent crises like the current one from reoccurring.

Rather than waiting until the next cascade is imminent, and then following the usual modus operandi of propping up the handful of firms that seem to pose the greatest threat, it may be time for a new approach: preventing the system from becoming overly complex in the first place.

I’ve had similar notions of my own, that these big, complex, and efficient systems are growing far too complex to be managed from above, that due to their complexity they cannot be effectively regulated by the government.  But where I differ is in the conclusion I draw from it.  I don’t want to shout, “Stop!  Your achievements are too complex for me to orchestrate!  Slow down!  Do less!”  I would rather accept something that used to be very hard for me to accept: that we don’t need a small elite overseeing our work and lives, that we don’t need to be managed as part of a coherent and comprehensible system of engineered order, designed to maximize a collective quality of life.

Maybe the proponents of Intelligent Design can’t prove their holy grail theory, that nature was put into order by a Great Being.  Maybe they should stop trying to make that leap, from the structure of the eye to the existence of a Great Being designer.  Maybe there are other things they could be doing.

Maybe trying to be prepared for every outside risk is ludicrous.  Maybe it can’t be governed away.  Maybe we simply can’t do it.  Maybe that’s not what we should be trying to do at all.  Maybe we’re not Great Beings.

On a routine basis, regulators could review the largest and most connected firms in each industry, and ask themselves essentially the same question that crisis situations already force them to answer: “Would the sudden failure of this company generate intolerable knock-on effects for the wider economy?” If the answer is “yes,” the firm could be required to downsize, or shed business lines in an orderly manner until regulators are satisfied that it no longer poses a serious systemic risk.