[Fis] Continuing Discussion of Social and Cultural Complexity[Fis] Continuing Discussion of Social and Cultural Complexity
From: Igor Matutinovic <[email protected]>
Date: Thu 15 Feb 2007 - 10:41:53 CET
Dear colleagues
I have the impression that there is an agreement about the existence of biological and sociocultural
constraints that impact on our ability to understand and manage socioeconomic complexity. These
constraints are organized hierarchically, as Stan puts it, {biological {sociocultural }}. As far as
I can tell, social science is not much interested to explore the constraints below the biological,
and if we take the perspective of evolutionary psychology, than the psychological level may be
subsumed in the biological.
Perhaps we could address socioeconomic complexity from the minimum of three different perspectives:
behavioral, informational or semiotic and material (the latter refereeing to the artifacts and
material substances that we pile up in our environment and which impact we cannot fully understand
nor control; e.g. products of nanotechnology; toxic chemicals, weaponry).
One behavioral and informational aspect of socioeconomic complexity can be identified in unintended
consequences of political actions aimed to design an institutional framework in order to achieve
certain social or economic purpose. Consider a simple example of the liberalization of electric
energy market in the US, UK and more generally in the EU. The aim of policy makers was to unbundle
the vertically integrated companies (power generation, transmission, distribution and supply) in
order to create a competitive environment which would ensure investments in new capacity and in
energy efficiency, and at the same time drive down the prices of electrical energy to the consumers
and industry. What happened after nearly twd decades of liberalization (apart the California energy
crisis in 2000/01) is that prices were fluctuating quite unpredictably, originally deintegrated
firms (like in England and Wells) started to vertically integrate while cross-border mergers and
acquisitions created bigger and more powerful energy companies than before (market concentration was
one of the thing that lineralization wanted to change). According to some authors none of the
original aims (price reductions, energy-efficiency, new investments) was fulfilled.
Now, the point for me is not that an unintended consequence did happen but the fact that policy
makers in the EU are continuing to push institutional reforms in spite of the fact that it does not
seem to work the way they want it. As long as we do not postulate that there is a hidden agenda
behind their stated goals, then either the decision makers are not rational (beacasue they push the
agenda with full awareness that it will not work) or they do not understand the processes and the
constraints they hope to affect. The latter may be the sign of the (social) system inability to
achieve certain goals in a complex sociocultural environment. This would not be surprising: the
signs that come from the energy market are not fully consistent and thus allow for different
interpretations; there are several competing theories that may be used to explain the market
dynamics and make predictions; interpretations may be biased by different ideologies and worldviews.
The liberalization of the energy market is a complexifying process: from the monopolistic, and state
regulated to the competitive, and profit driven industry. In this process institutional constraints
are continuously added: markets are composite institutions themselves and to these the policy makers
add numerous new rules to achieve their specific goals. The aim to streamline the energy sector by
using markets with additional institutional constraints may exceed our capability to handle the
process and forsee the consequences. To some extent, it may be a sign of diminishing returns to
complexity in problem solving that Joe addressed in his book "The collapse of complex
societies".
If we cannot manage the energy sector to serve certain social and economic goals, how can we hope to
be able to manage more complex situations like the climate change, poverty reduction and population
growth in the South?
Best
Dr. Igor Matutinovic
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