Dear All
Here we are again on the more earthly problems. Bob's remarks brings to the
arena the statistical description of events in socioeconomic systems and the
question as what kind of dynamical system economies are.
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.
Bob: 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?
SOC has been used as a metaphor or a model of biological and socioeconomic
dynamics. After tinkering with it for the past few years, I am akin to
believe that SOC might be a good model for ecosystems and evolution but not
so for socioeconomic systems. The main argument (details are available in a
paper, if someone wishes, I can e-mail it) is that human systems are
dominated by institutional design, which constraints self-organizing
processes, (e.g. economic activities), in a non-trivial way (the market
itself is an institution). The nature of institutional design is in
contradiction with the self-organizing principle which is at the root of
critical behavior. Also, the formation and behavior of autocatalytic
networks, which is endogenous does not fit well with formal characteristics
of SOC, which refers to "externally driven" systems. However, SOC as a
metaphor may be very useful for social sciences as it points at power-law
distribution of events, the existence of thresholds and therefore non-linear
response to perturbation, and the importance of local interaction (all these
were mostly ignored by mainstream economics and its formal models). After
some drifting, I am finally convinced that mechanical physical models in
general (SOC is one of them) are not good representations of socioeconomic
systems. The main point is that socially shared values and beliefs, and
their institutional representations are not susceptible to formalization
while, on the other hand, they play a major role in the overall evolution of
the system as well as in its medium term dynamics (which is perhaps the
focal point of research interest). Differing viewpoints on this issue are
most welcome!
Bob and myself pointed at power-laws as one of the hallmarks of (economic)
system organization. They (necessarily) arise from an interplay of
autocatalytic processes and a particular institutional framework which is on
one hand supportive of autocatalysis, and on the other it constraints and
buffers its dynamics. One of the major questions is, as Bob wrote, if major
"avalanches" can be avoided. The analysis of business cycles in the US
indicates, that in the second halve of the 20th century recessions might
have become milder, as a consequence of monetary and fiscal "automatic
stabilizers" and other institutions. Bob and myself argued in our
introduction that a substantial change in a dominant worldview is necessary
to reduce the intensity of autocatalytic process in the world economy. The
rationale behind this is simple, if we mange somehow reduce the intensity of
autocatalytic process we may at the same time reduce the environmental
impact and the magnitude of major negative events. In this process which may
be called adaptation, information processing is of extreme importance. We
have coherent information sets as worldviews and worldviews as information
processing systems. This forms a complex, self-referential system in terms
of Robert Rosen's definition of complexity (an observer sees a systems as
"complex" when he has more that one single description of it). We surely do
have different descriptions, e.g. business people, environmentalists, the
World Bank, indigenous populations, scientist (those who are concerned and
those who are not) etc..
If we agree that the dominant worldview (shaped as its by economic
rationality and preference for material consumption) is not an adequate
"information processing system" for dealing with informational feedback that
comes from natural environment, than an improvement or change of its design
have something to do with the size distribution of "avalanches", or not ?
I am trying to shift our discussion away from entropy and more in the
direction of information forming, transformation and its diffusion in social
and economic networks - I hope that Bob will agree with this proposal.
All the best
Igor
Dr. Igor Matutinovi�
Managing Director
GfK - Center for market research
Dra�kovi�eva 54,
10 000 Zagreb, Croatia
Phone: 00385 1 49 21 222
Fax: 00385 1 49 21 223
E-mail: igor.matutinovic@gfk.hr
www.gfk.hr
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Received on Fri May 20 13:04:03 2005
