[Fis] Economic Networks

[Fis] Economic Networks

From: Robert Ulanowicz <[email protected]>
Date: Tue 17 May 2005 - 19:01:40 CEST

Dear All,

My apologies once again for not being able to keep up with the day-to-day
exchanges. I've gone back over last week's postings and assembled the
following remarks, for whatever they may be worth:

Stan wrote:

> My take is that the creation of entropy is "accidental" to all real
> processes, not always causative.
> SS: Thus Bob eschews final causality.

Stan, I most assuredly do not eschew final cause. Rather, I wish to posit
final cause in the domain of some agency. I don't see agency per-se in the
action of the second law. The second law is what happens in the absence of
agency.

>In particular, I see in autocatalysis a "self-entailing" aspect that is
>not derivative of any associated gradient in energy (or exergy, to be
>more exact.)
> SS: So autocatalysis can occur without any energy input?

Certainly, autocatalysis doesn't occur in the absence of energy input, but
the input doesn't drive the autocatalysis in the same determinate way that
is common among non-living systems. To be more specific, autonomous
systems engendered by one energy gradient are capable of switching to
other gradients. We see that all the time in ecology and economics. The
final cause is not to be found in the energy gradient, but rather in the
"centripetal" behavior that is a hallmark of autocatalytic behavior (and
life) itself.

>There is an opposing tendency, attributable mostly to the action of
>autocatalysis (and the partial autonomy thereof) that acts in almost
>dialectical fashion against entropy.
> SS: My take is that this works WITH the Second Law. Indeed, since
> all gradients are unstable to metastable, they all must be dissipated.
> Autocatalysis, and any building-up tendency, is simply parasitic upon
> this necessary dissipation.

I wouldn't agree. I can conceive of gradients existing for indeterminate
time without being dissipated. That's why we had fossil fuels. Human
society, which arose out of the solar gradient, for reasons vested in its
own autocatalytic economy, sought out and switched to fossil fuels to
serve those ends. Fossil fuels didn't force themselves upon humans, nor
did they beckon to humans simply to be dissipated (some current wasteful
human activities notwithstanding. :)

Igor (Rojdestvenski) wrote:

> I may remark the following. In fact, the canonic formulations of the SL
> deal mostly with DISorder. Then SL may be the final cause of all order
> and all disorder. Which statement, in a way, with delicate dialectics,
> eliminates the object of the "final cause", and, possibly, the final
> cause >itself.
>
>What do you think?

Igor, I am certain you are better schooled in dialectics than I am. It's
just that I have trouble conceiving of nothingness as agency (which may be
what you are saying?) I look for either an enduring, stable constraint or
an active agency as that which pulls the system forward. It is difficult
for me to ascribe agency to the ever-widening abyss, but maybe I'm not
enough of an absurdist or existentialist?

I am sympathetic to the drift of Viktoras' questions to Stan on Fri, 6
May. Note as how economists and social scientists are not encumbered with
the same taboos that guide biologists. Direction and intention are very
natural phenomena in their domain. Biologists label it "epiphenomenal",
i.e., without real effect. As Carl Sagan remarked at the end of his
segment from Cosmos that dealt with evolution, after dwelling for an hour
on dinosaurs and other forms, "These are some of the things that MOLECULES
do!" I agree with physicist George Ellis that intentionality is a very
real phenomenon that can exert true agency, and the sooner we come to
terms with that fact, the better for science.

Loet wrote:

> I am afraid that these mechanisms are locally often beyond control.
> Giving people cash may help them in the short run, but not in the long
> run. The quality of the (knowledge-based) plan of what to do with the
> cash, is crucial.

And so institutions like the IMF fail to help developing countries? (I've
long suspected as much.)

Igor R. wrote:

> It (and IT, excuse my pun) helps local businesses allright, but
> overwhelming majority of those just digest either oil money directly or
> feed on the financial excrements of those who do (like selling computers
> to oil companies or doing catering services to companies selling
> computers to oil companies).

But such transfers are part of the overall economic structure. Why should
they be disregarded? (For a measure of the depth of the economy, see
Zorach and Ulanowicz 2003. Quantifying the complexity of flow networks:
How many roles are there? Complexity 8[3]:68-76.)

> But in my opinion (not very qualified, I admit), what in this
> discussion we call "knowledge based" economies are not such, because
> knowledge is not the ultimate flow that shares its energy and negentropy
> with the society but a system of tools to extract energy and negentropy
> from the ultimate flow which is, in the case of the Western world, the
> finance.

The progression normally is described as from (1) solar-based to (2)
fossil-fuel based to (3) information (knowledge?)- based economies. In the
western world, the "finance" you cite was formerly a surrogate for access
to fossil fuel. Perhaps the question is whether it is possible to proceed
from (1) to (3) without passing through (2)? Is India on its way to
leapfrogging in this manner?

> The most important question is Can C exist without A and B? Can everyone
> in the world be C?

Ah, I see I you anticipated my question. :)

Pedro wrote:

> Unfortunately I have not been able to read much in the last messages on
> entropy (being caught by ugly bureaucratic burdens), however they have
> rekindled and old reflection of mine on "social bonds" as a potential
> way to untangle aspects of social complexity ---Calcutta vs. New York,
> or a pre-industrial society versus a post-industrial one. What types of
> humans bonds do they purport respectively? I mean, the possible
> conceptualization of classes of social bonds in a way not too dissimilar
> from chemical ones (eg, the different kinds of bonds in biomolecular
> polymers supporting cellular organization) might lead to notions of
> social entropy growth/decrease with the corresponding correlate of
> complexity of social structures. Then, some vague inklings on
> "ascendancy" in economic networks might be related with such social
> structures (an inclusive ascendancy, perhaps)... If finally some sense
> emerges, ecological ascendancy could somehow be represented or taken
> into account, or interrelated, with the social measurements of
> "ascendacy" in such globalized social networks ---and the controversial
> attempt on evaluation of ecosystems services might be seen in a new
> angle.... Sorry if all that sounds too vague and confusing

Well noted! Your observations are the crux of any number of efforts by
sociologists like Jeff Johnson or Steve Borgatti, who study the structure
of social networks. I have tried to sell the network measures ascendency
and overhead to the sociologists, but with only marginal success. Back a
few years ago sociologists and ecologists discussed their common interest
in network analysis at a workshop in North Carolina. See

<http://online.sfsu.edu/~webhead/scipersp.pdf>.

As economists also have a legacy of network analysis (Leontief input-
output analysis), maybe we should consider a forum whereupon these two
groups (or include the sociologists again, as well?) could swap ideas on
networks?

Stan wrote (in response to Victor):

>> If we assume that whatever occurs, it does so in order to produce
>> entropy (A) then (self)organization (B) is "just" a side-effect of
>> entropy production..
> SS: From the Universe's point of view that is exactly so. It can be
> justifed arithmetically by noting that effective (irreversible) works
> always lose half or more of the available energy tapped for them.

>> Otherwise whatever occurs, it does so in order to produce structure
>> (B), then entropy (A) is "just" a side-effect of (self)organization...
> SS: This is the point of view of a local system. It cannot be
> justified arithmetically. As well, the Second Law, as a global tendency
> was in effect prior to any local system, all of which must serve it in
> order to develop and maintain themselves.

Stan, I'm not sure what you mean by "arithmetically"? Are you comparing
magnitudes? If so, this is a time-honored and trustworthy endeavor (called
dimensional analysis.) Except that a mere majority doesn't usually carry
the day. One has to see at least an order of magnitude ratio before things
begin to pale in relation to one another.

> However, we can easily see that entropy production for the Universe is a
> perfect explanation for it. We cannot resist warfare because we cannot
> resist the most prominent law of Nature.

Warfare is so absurd that I can almost buy your explanation for it. :)

> I am interesting in bringing final cause back into the fold of thinking.

As am I, but nilpotency doesn't seem to me like the way to do it. In a
way, you are attempting to stand Thomism on its head.

>> If the Entropy is the final reason, then it also means that the final
>> reason of our civilization is its final death (refer to ***)...
> SS: One must conclude this when looking at, say, American history.

I see rather a system in the act of losing its direction (i.e., one side
[the order- building side] of the natural dialectic begins to fail.) That
the second law takes over and things decay, doesn't make it he final cause
of the system when it was robust.

Soeren wrote:

> Bateson developed a theory of ecological cybernetic mind as recursive
> loops folded into each other carrying differences, but it never said
> anything about qualia, free will and consciousness as a first person
> experience. I do not know if you want to use fraises like: "what is the
> meaning of the computers work seen from the computer?"

I am scheduled to talk in Copenhagen this August on a forum dedicated to
the thoughts of Bateson. (I must confess, I am ill-prepared to comment on
Bateson, but I must attempt something.) I'm not sure how well Bateson
integrated the concept of the unique into his recursive loops. If,
however, one looks upon those loops as selecting among a host of singular,
unique events, then issues like free will and emergence lose their
contentious character.

> Even on the semiotic it is very difficult. Is the goal of the universe
> or rather the Semios to evolve as much semiotic freedom as possible? Is
> it the goal of living systems? Is free will the highest gift in the
> universe?

In my view this is an absolutely necessary trend, but insufficient as a
theory of evolution. The trend toward freedom and diversity (which often
is abetted by the SL), if left to run unmodulated, will soon result in the
dissolution of the system. An opposing trend is required to system
elements in coherence (although it perforce decreases diversity.) Stan
sees this latter trend as a manifestation of the former. I hold that they
are distinct, albeit mutually obligate.

> You can add heaven and hell or reincarnation with thousands of life
> cycles in learning to be good, wise and loving, and Buddha nature or a
> personal or triune God - and the question still remains unanswered. What
> is the purpose and meaning of God and what he does with us??

These, of course, were some of the considerations of Aquinas, who saw God
as final cause. As I mentioned above, positing the SL as ultimate final
cause turns Thomism on its head.

Stan wrote:

> SS: As long as we engage in war while denouncing it at the same
> time, I am entitled to say that we build in order to burn so that we may
> rebuild again -- endlessly, with the ultimate result (after our
> superstructures lie in the sand like the pyramids) of having
> satisfactorily contributed to Universal equilibration.

Stan, when I read this, I almost get the feeling that you are baiting us
to deny the primacy of the SL and to renounce warfare? Are you a prophet
in disguise? :)

> In some cases, like human warfare pursued by modern societies there does
> not appear to be a satisfactory understanding of it at any level above
> the physical, and so we must be content with that, however humiliating
> it is to see that modern society cannot rise above its lowly basis.

What about those, like Holling, who would regard warfare as a
manifestation of self-organised criticality (SOC)?

> In the past some authors did indeed implicitly use te above format,
> and ended with a mystical union as the most superior meaning. But,
> since this end did not arise in more than on or two cultures, we can see
> that there would be contention over this, which as we can see today
> within the Abrahamic Faith Religions, since these meanings are
> non-negotiable, we are soon back to warfare again, which will, once
> again, not be explainable within these superior understandings.

Maybe a little too fatalistic? If the Enlightenment provided us with
anything, it was to renew the possibility of tolerance for conflicting
beliefs. Many are wont to attribute warfare to conflicting religious
beliefs, but this neglects the fact that the majorities within the
conflicting religions eschew violence as the solution.

Aleks wrote:

> So while Stan sees entropy as an answer to "why", I see entropy as a
> particular model of "why". Structural attractors are also models of
> "why", for example. By the way, "why" is not as precise as the actual
> definition of the final cause. In all, I'm quite confident in the
> Aristotelian model, but I feel I can arbitrarily redefine what entropy
> is.

Good point. In fact, there is even the quantitative ambiguity built into
entropy that it is always relative to a reference state.

> However, there are examples of imbalance among the causes. For example,
> if you have a lot of energy (growth), it will disperse into a lot of
> entropy. If you have a lot of entropy, there is a lot of likelihood that
> some local gradient will get amplified and possibly self-organize. It's
> not that the model would "force" this to happen, it's just that our
> reality is such that all causes are needed.

A poly-lectic approach?

Stan wrote:

> I have just been involved in a discussion where I have advanced finality
> alongside formality, but it sees to have been taken that I was denying
> the importance of formality.

I have an ironic (for me) predilection to be more material about formal
cause than most examples allow. That's why I'm stuck with the unsavory
example of a military battle to illustrate formal cause. In a battle, the
lay of the land, the juxtaposition of the armies or armadas, the angle of
the sun, the direction and speed of the wind, etc. all play the very
physical role of formal cause. Can anyone suggest a less ugly example that
maintains the potential physical role for formal cause? I would be most
grateful.

Viktoras wrote:

> Is there a clear distinction between entropy and reallocation of
> resources both from economical and ecological standpoints ?

Usually, entropy is tied to energy density and so it becomes easy to
identify. While all processes create entropy as a whole, various
sub-processes can decrease entropy.

> And, once we speak about money flows - taxes play a role of entropy
> (just paid my taxes, so it really looks like entropy from internalist
> positions :) Still one has to admit that taxes are used by a superior
> system (country) as a resource by redistributing it elsewhere to ensure
> functioning of its parts that otherwise would have not influenced each
> other.

As I mentioned in an earlier posting, taxes are an imperfect analogy for
entropy production, because taxes are aggregated (anti-entropic) into a
pool that then has substantial agency for organization (or further
dissolution, depending upon the particular government involved. :)

>Isn't then entropy and (self)organisation like two sides of a coin ?

This is precisely Stan's position. The proposition has a Zen-like quality
to it. Perhaps I have been so inculcated by categories, that I am
compelled to try to maintain crisp definitions? I.e., order ~= disorder.

Igor (M.) wrote:

> Therefore, I think that Stan put the problem of sustainability in a
> strikingly sharp perspective by proposing its alternatives: endless
> wars or environmental collapses, or both of these at the same time.

One way of coalescing Stan's alternatives is that both involve
self-organising criticalities ("avalanches".) The question then becomes,
can major SOC's be avoided?

Soeren wrote:

> So, here the drive towards heat death creates structures that carry life
> and consciousness and therefore love - as I interpret him. As the energy
> is converted to entropy, evolution and the universe will come to a hold.

John Haught has characterized heat death and the attitudes it spawns "the
cosmology of despair". Your view seems to avoid that characterization, I
would think?

> From a physicalist's point of view it does not make sense to speak of a
> final course outside living beings - for many of them not even with
> animals. Some even do not believe in free will or that out
> self-consciousness has any causal influence on the material world.

I'm not sure I agree. A physicalist could look at a system in Stan's
triadic fashion and identify as final cause any influence that is exerted
from the higher level down upon the focal level.

Aleks wrote:

> Now my version of Pascal wager:

I like it! :)

Pedro wrote:

> Also, one could take ideas from Jared Diamond, and from many others, to
> argue about the existence of a further level of natural grouping or
> networking, based on a more labile and versatile level of "medium" bonds
> linking together, for instance, the members of hunter-gatherer bands
> (e.g., relatives & 'friends').

Sociologists are working towards identifying such groupings. See: Nature
426:282-285.

> In my previous message I alluded to "partitions" that imply very weak
> social bonds that we may somehow experiment under the form of multiple
> "identities".

The big problem with social network analysis is the difficulty with
quantifying non- physical bonds. (The same problem exists in ecology, but
not quite to the overwhelming extent that one finds in sociology.)

> ... let us note that, intrinsically, science and technology partake the
> form of nets too ...

Indeed! In fact, Zorach (Complexity 8[3]:68-76) shows that any set of
well-defined conditional probabilities is homomorphic to a weighted
digraph!

> Let me finally suggest to our discussion chairs, Bob and Igor, that we
> look afresh on these networks organizing principles, both specific and
> common--perhaps among them: information, ascendancy, value... It may
> conduce to another interesting approach to the sustainability theme.

Point well-taken! I, of course, have my own coherent view of such
dynamics, parts of which have leaked out in my responses. But it is a
laborious task, and one that would bore most, to attempt a systematic
presentation. In fact, one doesn't really exist yet. My 1997 book is
obsolete to a degree, and I am trying desperately to reserve time over the
next year to begin the task of coalescing the various thoughts, scattered
over numerous publications, into one coherent presentation. I have a
tentative title, however, "A Third Window: Process Ecology". (The first
two windows being Newtonianism and Darwinism, respectively. :)

James wrote:

> "Degrees of freedom" are not static computational factors to help us
> understand - in snap-shot fashion - the 'state or states' of given
> systems under observation or evaluation. Rather, they are intrinsic
> utile resources - endemic and active in all ongoing processes. They are
> the 'opportunity spaces' that systems draw from -and- can alternatively
> cross-access and shift performances through, since the semiotic values
> of all tiers and relations come into play, with accessibility allowing
> changes in actions, policies, coordinations and goals.

I couldn't agree more. In my lexicon it takes the form of "overhead",
which, despite its sometimes negative connotation, is absolutely essential
to creativity -- natural or human.

> Surviving, enduring, prevailing .. are intrinsically improved when the
> actionable performance space is larger for one system over another (all
> other factors being equal)

Yes! James Kay and I were keen to write this into the formulation of
"ecological integrity" that we formulated for the Canadian govt.

Aleks wrote:

> Autocatalysis explains the growth of a company. Entropy explains the
> loss of direction and motivation, the increase in local self-interest
> that causes the death of a company. The life-cycle is the gradual
> transition from an autocatalysis-dominated system to an
> entropy-dominated system in the absence of self-cleaning.

I'm very pleased to see this. It accords well with the notion that Igor
and I were trying to convey in our opening statement.

> Growth, indeed, is nicely described in terms of autocatalysis (order
> aligning the surrounding disorder) than through physicalist notions of
> "force" or "gravitation".

This is what I am pointing to with the term, "centripetality".

> In modern agricultural experiments, therefore, one chooses the best
> rectangular section of the field to save for seed: that particular mix
> of small and big potatoes together did the best. As a policy, it's a bit
> unfair, but it's balanced.

Nice example! It supports what I was trying to say when I alluded to the
fact that efficiency isn't the whole story. In fact, when it comes to
persistence, it is subordinate to reliability. By choosing a good plot,
one is sure to include both efficiency and reliability into the mix.

John wrote:

> If economics is the 'dismal science' IS must be the 'abysmal science' -
> as we stare down the precipice into this terra incognita there are no
> interdisciplinary conceptual pitons we can use to grapple with the rock
> face (unlike 'value' 'growth' 'competition' 'market' 'equilibrium' etc
> in economics).

I entertain the conceit that with "Process Ecology" we are building such
pitons as "ascendency" (a scaled mutual information) and "overhead" (a
scaled conditional entropy.)

To Karl:

I was impressed with how you used set theory to re-articulate everything
Aleks said. In my (possibly naieve) view, most of what is said in set
theory is ripe for re-interpretation in terms of networks as well. Then
there's Stan, who will object to the use of crisp sets, advocating the
notion of "vagueness" instead, but I'll let him do the talking there. :)

To Igor M.:

A very nice interpretation of network ideas (posted on 13 May) in economic
terms. I wish it could be disseminated even more widely than on FIS (even
though they are the true cogniscenti. :)

Pedro wrote:

> the way companies account, and the way we get valued ourselves within
> social activities would be firmly rooted in our averaged position in an
> amazing, volatile abstract cloud of multidimensional network
> interactions (weak bonds) projected or "measured" into a unified
> symbolic equivalent.

For the record, the extension of ascendency into multiple dimensions poses
no conceptual hurdle. It's just that sufficient data (in ecology at least)
are so hard to assemble to make such multi-dimensional calculations.

>Having a future fis session on neuroinformation would be quite desirable.

Well, network considerations would be significant there, too!

James wrote:

> Theme: systemic health and viability rests on diversity (systemic
> entropic enlargement of action potentials within an organization). Paper
> sub-topic: inter-tier interest rates vs economic vitality; expand
> assets-access rights improves a society.

Most cogent here! That's what Igor and I were aiming at with our paragraph
on "efficiency isn't the whole story".

Stan wrote:

> Entropy production finds its meaning in Universal disequilibrium, the
> result of accelerated expansion of the Universe, while self-organization
> finds its meaning only locally in the drive for self-realization.

Or, in the English words, sometimes put to Offenbach's "Barcarolle", "Here
we are, adrift on a star, and what is the journey for?" For now Stan's
physicalist interpretation is consistent, but who knows what the future
might bring, were humanity to loose it earthly bonds? (And, of course, the
non-physicalists among us have a different perspective on the situation.
:)

Again, Hope I haven't tread too heavily on anyone's toes.

All the best,
Bob

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