Dear Igor and Bob,
Thank you for your interesting opening to the discussion.
While reading it, I had the impression that the "worldview" is too much
conceptualized as a single and closed system like a Kuhnian paradigm. Since
the 16th century worldviews are in flux and internally
differentiated/differentiating. The economic system of the market, for
example, is mapped cognitively in a discourse other than the discourse of
physics or the discourse of power. The different worldviews (codifications
of the communication) disturb one another and thus can provide another
source of change.
Perhaps, your own statement can be considered as one such worldview, namely
one of ecosystems theory. In this view the resources are finite and
therefore exhaustible. Information resources, however, are not finite. In a
knowledge-based economy (unlike a resource-based economy) other dynamics for
the expansion may feed new loops into the system. For example, Holland is
one of the largest producers of tomatos while tomatos can not be bred in
Holland naturally (because of the lack of sunshine). The production of these
tomatos is completely knowledge-based. Indeed, this is energy-costly, but
energy is only finite at the level of the universe (and not at the level of
the earth).
Thus, one can entertain very different worldviews. The interfaces among them
can be considered as sources of innovation, for example, when market
perspectives and research perspectives can be interfaced.
Perhaps, you can easily integrate this into your model?
With kind regards,
Loet
________________________________
Loet Leydesdorff
Universit� de Lausanne, School of Economics (HEC);
Amsterdam School of Communications Research (ASCoR)
> -----Original Message-----
> From: fis-bounces@listas.unizar.es
> [mailto:fis-bounces@listas.unizar.es] On Behalf Of Robert Ulanowicz
> Sent: Tuesday, April 26, 2005 3:35 PM
> To: fis@listas.unizar.es
> Subject: [Fis] Economic Networks
>
> Dear Friends,
>
> On behalf of Igor Matutinovic, I am initiating the discussion
> thread on Economic Networks.
>
> We are looking forward to much fruitful dialog.
>
> The best to all,
>
> Bob & Igor
>
> **************************************************************
> **********
>
> Organic and Cognitive Dimensions
> of Socioeconomic Systems and Their
> Relationship to Sustainability
>
> Igor Matuttinovic
> GfK - Center for Market Research
> Zagreb, Croatia
> <igor.matutinovic@gfk.hr>
>
> and
>
> Bob Ulanowicz
> Chesapeake Biological Laboratory
> Solomons, Maryland USA
> <ulan@cbl.umces.edu>
>
> Let us assume that economies have two basic
> dimensions of internal order: one is organic and relates to
> functional and structural properties, which have their
> analogue in other living systems like ecosystems; and the
> other is cognitive, meaning that a broad perspective of the
> world that human agents hold streamlines collective behavior
> and economic activities. Both dimensions of order are
> maintained by dissipating the fabric of the natural
> environment. These dimensions are dynamic and the change in
> their internal parameters reflects on the scale and intensity
> of the interference with natural structures and processes.
>
> On the organic side we propose that dynamics in
> industrial market economies are essentially autocatalytic
> (Matutinovic, 2005).
> Autocatalysis refers to "any cyclical concatenation of
> processes wherein each member has the propensity to
> accelerate the activity of the succeeding link" (Ulanowicz
> 1999, pp.41-55). Through competition and selection
> autocatalysis imparts organization to a system, which can be
> recognized, among other things, in the asymmetric
> distribution of flows among its members. It appears that
> industrialized economies have reached a high level of
> internal organization (ascendency), characterized by
> (truncated) power-law distributions across different
> structural and dynamical variables (size of firms, size of
> cities, degree distribution of business links, business cycle
> fluctuations etc.). (Matutinovic, 2002; 2005)
>
> Because of their inner dynamics and openness to the
> wider system, economic autocatalytic assemblages, like their
> counterparts elsewhere in the living realm, exhibit growth
> and centripetality in that they amass material and energy
> from their environment.
> Additionally, as a consequence of competition and selection,
> autocatalysis tends to ratchet all participants towards
> higher levels of performance (Ulanowicz 1997, p.46). This
> process is not confined to a single loop but transfers its
> influence to the wider systemic environment via connections
> that exist among assemblages of different autocatalytic
> loops. One example of autocatalytic process in economy, which
> comprises all of the above mentioned properties, is the
> formation of industrial clusters. Centripetal process of
> amassing material and energy can also be seen on the global
> scale, where the G7 (economic system level) and multinational
> companies (agent level) appropriate disproportionate chunks
> of natural sources and sinks. Modern market economies are
> probably much more efficient in their resource consumption
> than the early industrial or pre industrial societies. The
> problem is, clearly, that the scale of their dissipative
> processes has increased markedly with respect to those of
> natural sources and sinks, a situation that is generally
> regarded as unsustainable.
>
> Another aspect of "organic" in socioeconomic systems
> is related to diversity. Ecological economists generally
> agree that functional and structural aspects of biodiversity
> have their analogue in socioeconomic systems, especially when
> we regard the global economy and the biosphere. Socioeconomic
> diversity is functionally related to thermodynamic efficiency
> in energy/resources exploitation, adaptation to local
> environments, avoiding of head to head competition over
> resources and preserving resilience to yet unknown shocks and
> boundary conditions (Matutinovic, 2001). The issue of loss of
> socioeconomic diversity is closely related to that of scale
> of dissipative processes:
> as the number of industrialized economies increases (maximum
> power efficiency increases) the cumulative burden on
> environment becomes unbearable, and the thermodynamic
> efficiency of the system goes down (as societies "modernize"
> according to the Western model they become increasingly
> unable to stay with their particular local climatic and other
> natural endowments).
>
> On the cognitive side we can make distinction between
> worldviews, institutions and mental models. One can define
> worldview as a set of beliefs, symbols, values and segments
> of objective knowledge that is widely shared by a society
> over a considerable period of time (for at least one
> generation). It provides a socially-shared cognitive
> framework that relates an individual to her or his natural
> and social environment. Institutions generally define
> behavioral framework in a given society. They streamline most
> of the societal and economic activities, and provide a degree
> of behavioral stability and predictability over longer
> periods of time. Institutions may be defined as "a regularity
> of behavior or a rule that is generally accepted by members
> of a social group, that specifies behavior in specific
> situations, and that is either self-policed or policed by
> external authority". Mental models are cognitive devices
> employed at the level of the individual agent, and are
> composed of values, beliefs, rules, and habits that relate an
> agent to everyday life situations. The process of interaction
> between mental models at the individual level and worldviews
> and institutions at the level of society is complex and
> multi-directional, to the extent that it is impossible to
> construct clear-cut boundaries of mutual influence or unique
> causal loops. We can focus, however, on influences that work
> down the heirarchy: from the worldview, to institutions, and
> finally to the behavior of the individual. Since a dominant
> worldview and its institutional framework are shared by a
> society, they define its prevailing and characteristic
> behavioral patterns. There is a feedback from behavior to the
> worldview which symbolizes that individual or group actions
> may affect the prevailing paradigm either gradually (cultural
> evolution) or abruptly (social revolution). Technological
> advance and change, which result from individual and
> collective actions, feeds eventually back to behavior by
> affecting directly life styles, and indirectly by influencing
> the dominant worldview. An example of the first is the impact
> of mass production of automobiles on individual transport
> habits, and an instance of the second is the reinforcement of
> those values that are related to individualism, freedom of
> movement, and material possessions as status symbols.
> Collective behavior and available technology define the
> overall impact that socioeconomic system exerts on environment.
>
>
> Selection <---------------
> Process \
> | |
> | |
> | ______________ WORLDVIEW <---------.
> | / \
> | | |
> \|/ \|/ |
> Institutions Update |
> | |
> | _ ENVIRONMENT |
> | /| \ |
> | Action / Reaction \ |
> | / _\| |
> --> Behavior Feedback
> Information
> __
> /\
> /
> Uncertainty
>
> FIGURE 1
>
>
> A dynamical model of institutional change under
> feedback would depict such change as involving two major
> elements: the natural environment, and the cognitive
> constraints embodied in the prevailing worldview (Figure 1).
> The institutional framework defines the collective behavior
> of a society with respect to the natural environment -
> basically the patterns of exploitation of its sources and
> sinks through the activities of production and consumption.
> These activities produce a reaction from environment which
> feeds back to the world view in the form of information.
> Proper interpretation of feedback information is disturbed,
> however, by fundamental and procedural uncertainty, since
> scientific models and theories cannot fully encompass the
> complex dynamics of ecosystems or the biosphere. An ambiguous
> or partial interpretation of feedback information will impact
> negatively on its ability to update the dominant worldview.
> For example, uncertainty in the interpretation of data
> related to global warming weakens any update of the current
> materialistic, growth oriented worldview and, consequently,
> results in only palliative institutional changes (a slow and
> uncertain adoption of Kyoto Protocol; the introduction of
> trading in pollution permits instead of imposing more
> stringent rules on industry and consumer behavior, etc.)
> Similarly, early misinterpretation of low ozone levels in
> Antarctic as "data noise" most probably retarded global
> institutional action (the Montreal Protocol) against the
> application of CFCs in manufacturing and consumer products.
> Institutions are subject to a selection process that may be
> cultural (social and economic) or environmental.
>
> A negative environmental feedback, however, does not
> act on an institutional framework directly - a dominant
> worldview acts as a "censoring body" that filters alternative
> courses in institutional change regardless of their objective
> value or urgency. This process of biased and constrained
> institutional selection retards societal learning and
> adaptive change in collective behavior. The model implies the
> likelihood of a worldview replacement after a single, strong
> update event (e.g. environmental collapse) or when the
> cumulative effect of the updating process had surpassed a
> threshold, beyond which a dominant worldview becomes
> untenable. However, when this final change might happen
> remains intrinsically unknowable. It remains a fundamental
> uncertainty as to whether the dominant worldview in the North
> will be changed in time to avoid major
> ecological/socioeconomic crisis.
>
> It is important also to note that the welfare
> liberalism of the North and the drive towards economic
> globalization are both strongly tied to the notion of
> efficiency. Time and again, socio-economic changes are
> justified on the basis of their contributions to overall
> efficiency. While it is true that autocatalysis promotes
> efficiency, without which an economic community is liable to
> being displaced, the lesson from the biological realm is that
> efficiency is not what sustains communities in the long run.
> Diversity of processes and sectors implies the co-existence
> of various degrees of efficiency. The cost of retaining
> structures and processes of less than optimal efficiency
> (referred to as "overhead" in network analysis) can be more
> than recouped when the system is impacted by a novel
> disturbance. At such time of stress, it is usually from the
> suboptimal system elements that a response arises that allows
> the system to persist. As an extreme example, a community
> that outsources most of its manufacturing capability in the
> name of the efficiency of low-cost labor elsewhere, obviously
> becomes highly vulnerable to any multitude of perturbations
> that might disrupt global trade. The integrity of ecosystems
> is said to reside in a tension between the (opposing) trends
> towards efficiency and diversity. To extirpate either would
> render the system unsustainable (Ulanowicz 1995.) The same
> likely could be said of social and economic systems.
>
> The pursuit of sustainability may be, therefore,
> related primarily to the possibility of change of the
> prevailing (Western) worldview based on materialistic values
> and an unjustified, disproportionate belief in the ability of
> market efficiency alone to mediate most of the social,
> economic and environmental relations. The positive change of
> dominant worldview should subsequently reduce the intensity
> of autocatalytic processes in the world economy, and release
> the current pressure to diminish cultural diversity. It will,
> therefore, reflect on the "organic" dimension. Without such
> systemic changes we can hardly hope that any further
> improvements in organization of material/energy flows
> (industrial ecology, cleaner production and similar concepts)
> will help solve the problem of our impact on Nature. The
> "window of vitality" must be related in socioeconomic systems
> to both cognitive and organic dimensions.
>
>
> References:
>
>
> Matutinovic, I. 2001. "The Aspects and the Role of Diversity
> in Socioeconomic Systems: an Evolutionary Perspective".
> Ecological Economics, 2, 239-256.
>
> Matutinovic, I. 2002. Organizational patterns of economies:
> an ecological perspective. Ecological Economics, 3, 421-440.
>
> Matutinovic, I. 2005. The Microeconomic Foundations of
> Business Cycles:
> >From Institutions to Autocatalytic Networks. Forthcoming in
> Journal of
> Economic Issues, December.
>
> Ulanowicz, R.E. 1995. Ecosystem integrity: A causal necessity. pp.
> 77-87. In: L. Westra and J. Lemons (eds.). Perspectives on
> Ecological Integrity. Kluwer, Dordrecht.
>
> Ulanowicz, R. E. 1997. Ecology, the Ascendant Perspective. New York:
> Columbia University Press,.
>
> Ulanowicz, R.E. 1999. Life after Newton: an ecological metaphysic.
> BioSystems 50: 127-142.
>
> ******************************** END ******************************
>
>
>
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Received on Wed Apr 27 07:53:17 2005
