Unintended consequences:: who’s kidding who?

A parable from the 19th Century that the insurance industry would do well to remember as it (directly and indirectly) presides over a ‘system’ whose man-made complexity – created to strip value from its customers/suppliers in order to sustain its own, spiralling and unregulated, greed – is the biggest single threat to its survival own.

PLEASE follow the links (below) in relation to opportunity costs and …unintended consequences for further explanation. Both are economically significant, yet, apparently, too readily overlooked by acolytes of Irresponsible Capitalism. Yet another entry for the bulging category of inconvenient truths to be swept under the proverbial Corporate carpet!

Opportunity costs: refers to efficient use of resources (does the term ‘peak oil’ mean anything to you!?)

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

-David Attenborough

Law of unintended consequences: is particularly relevant to those of us with an ‘interest’ in complex systems, risk, complexity and resilience. For, although recognised in the days of Adam Smith and the Scottish Enlightenment, it is too readily overlooked. Now that’s bad enough BUT, when you recognise what we now know about dynamic, non-linear, business [digital] systems, IT IS CRIMINAL! As is the ongoing practise of teaching economic theory that is known to be flawed!!!

…the consequences of policies will depend critically on the nature of the interdependences

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

It should be apparent, to any educated person, that Classical economics has no place in the real – dynamic, non-linear, inter-connected – world of finite resources. Accept that now so we can prevent even bigger gambles that could accompany the advent of Big data: more data isn’t the issue but less prediction and better analysis are!

Read on: Classical Economics or Complexity Economics?

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New Book:: ‘Governance Reimagined’ by David Koenig

 

Imagine, if you will, my surprise and delight when I received an email from David Koenig  (Author of the above title) inviting me to share thoughts on the subject matter of his book, from which this brief extract is taken!:

“Complexity Economics is emerging…we will simply refer to their emerging way of thinking as Complexity. What makes the Complexity group unique is their focus on explaining and showing how value is created: how groups of things work in systems and how those systems interact to make more out of a scarce input like economic capital than existed before. It’s a blend of economics, psychology, biology, physics, and other sciences, and it is contributing to one of the most important developments in finance and economics, ever. You know already that our world is full of complicated systems. However, not all complicated systems are complex systems…”

This and David’s breakdown of the present value equation were enough to have me scrambling to respond to his request before I even got as far as reading an excellent, informed and insightful, 5* Review (click on the link for the full review).

Economics and the revolution in the field – LA Times.com

Might this explain the renewed interest in my previous blog “Complexity Economics”!?

modern economics has buried its head in detail but ignored the systematic character of capital flow, he claims, and it is time for a restore an understanding of how capital works

I hope so because, of late I keep coming back to the words of Dave Snowden: “Practice without sound theory does not scale”. Think about the implications for global commerce and the huge number of over-remunerated “experts” that populate, such as, the Financial Sector and you may begin to understand the reason for institutional intransigence in the face of well-founded criticism of theory, practice and culture.

Obviously, the global financial crisis brought the failures of the economics profession into stark relief. But there still hasn’t been a significant public movement of established professional economists away from orthodox theories. However, as the pernicious effects of instability and inequality become part of daily life, frustration with stale economic ideas is starting to turn into action — at least on the part of some.

So this is where economics finds itself today, stuck between failed methodologies and whispered realities. It can continue to produce elegant theorems that work only by ignoring obvious real-world situations and conditions. Or it can break free of its restrictions and apply its rigor to addressing society’s most intractable problems.

The choice is up to the economics establishment. But the revolution has begun.

via Economics and the revolution in the field – latimes.com.

This extract dates back to an article I wrote in 2010:

It is easy to challenge “conventional wisdom” based upon the facts but, as history shows us, change can be vehemently resisted when it comes up against entrenched “belief systems”…particularly when such change presents itself as a threat to those for whom power and wealth (individually and collectively) has derived from their “mastery” of the civilized world as we have come to recognise it.

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USA on the Edge of Chaos!?

I always thought I had a good idea what Tainter and (to some extent) Beck were alluding to when referring to “elites”, essentially, bringing the house down rather than give up what they have grown so accustomed to viewing as theirs to do with what they liked. But this piece is mind-blowing and so blatant SOMEONE needs to call a halt to it all now or the dollar won’t last until 2015 and I dread to think of the implications for US citizens….WikiLeaks exposing some truths should be the least of their worries.

Noam Chomsky has recently talked of the “profound hatred for democracy on the part of our Political leadership” and, more controversially drew comparisons with late Weimar Germany

Government Says No to Helping States and Main Street, While Continuing to Throw Trillions at the Giant Banks

If you can spare an hour (or so) please listen to what Prof Ferguson has to say. Initially I was on really interested to hear what he said about the relationship between Empires – Complexity Theory – Economics but I was unable to drag myself away. BUT do yourself a favour, skip the intro (it’s torture), click to “Watch Full Program” and, at least, spare 8mins to absorb Chapter 4. Unless you are pressed for time…or already know everything…you WILL … Read More

via Get “fit for randomness” [with Ontonix UK]

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