Economic madness:: way to go Sir David Attenborough!

‎"Anyone who believes in indefinite growth on a physically finite planet is either mad, or an economist."

-David Attenborough, 2011 speech to the RSA

Enhanced by Zemanta

Micro, Macro, Meso, and Meta Economics – Project Syndicate

If classical economics is known to be ‘incomplete’, so deeply flawed or theoretical to be useful in the real world WHY do they still try to tell us…anything? WHY do we still place so much store in what Economists tell us?

The British economist Fritz Schumacher understood that human institutions, as complex structures with dynamic governance, require systemic analysis. He defined meta-economics as the humanizing of economics by accounting for the imperative of a sustainable environment; thus, he included elements of moral philosophy, psychology, anthropology, and sociology that transcend the boundaries of profit maximization and individual rationality.

Ontonix have, recently, developed a tool to deal with Large Ecosystems: MetaNet™

Complexity, Leadership and Policy Making:: A New Hope? l Huffington Post

Oh how I would love to believe that there was real cause for “new hope”! But I fear that the author(s) have, in the last sentence, (just about) summarised why I wont be holding my breath.

Not only are Financial leaders “trained to use” linear models but they have spent so long and so much on creating and promoting them: through Politicians; traditional media; Academia (Classical Economics in particular); clever (if ambiguous) marketing and reaping the excessive rewards of their endeavours, that they have become, like Rating Agencies, “pillars” of a flawed belief system and self-serving culture: hubs of systemic risk.

What they had not “modelled” was the true cost of adding layer upon layer of complexity – perhaps they should familiarise themselves with some Complexity facts. Whilst this course served them well in a, now past, era it has made them so fragile that they have lost the agility required to adapt to the uncertain and volatile environment that they have created. They are casualties of their own success…with wider society as misinformed victims!

…the world is not a complicated system: it is a highly complex one that most institutions and people in charge are not yet properly equipped to handle.

Fortunately there is a new lens to help us understand these strange patterns of behaviour, a form of “human microscope.” That lens is the science of complex systems, simply applied. It gives us the power to understand how small and large numbers of ‘things’, be they people, cars in traffic, or actors in a financial system, interact and create dynamic patterns of behaviour. These coordinating patterns occur frequently, at all levels of observation, from neurons firing in the brain to a crowd acting in unison. And like all complex systems, predicting collective patterns is anything but simple. This is because there is no direct, linear and unequivocal relationship between individual and collective behaviours.

We believe that people should stop thinking that a linear approach, where a leader, or group of leaders, decides what regulation or safeguards should be used to solve a crisis. Linearity is not enough to understand our world and try to solve its problems. It simply does not work. Looking at a crowd, for instance, we might feasibly know the individual behaviour of each person, each component of the system. We might even be able to determine the interactions of some of these components. But, crucially, we cannot predict with any certainty what the outcomes will be. At least not with the linear models most leaders have been trained to use.

via Olivier Oullier: Complexity, Leadership and Policy Making: A New Hope?.