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Social Complexity, Public Policy and Subsidiarity
Presentation to IES on 21 September 2011
Greg FisherManaging Director, [email protected]
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IntroductionMy Background- Bank of England – 9 Years- Macro Hedge Fund – 3 Years- Senior Research Associate of LSE’s Complexity Group- Chief Economist at ResPublica 2010-11- Managing Director of Synthesis
Synthesis- “Think-Tank” set up by myself & Paul Ormerod in June 2011- Centred around Complexity / Whole Systems thinking- Apolitical
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"We can't solve problems by using the same kind of thinking we used when we created them.”Albert Einstein
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Structure-Context – Social & Theoretical-What is Complexity science?-So What?-The Political Economy
- Focus on: Efficiency versus Resilience- Focus on: the ‘Greek tragedy’
-Historical Perspective-Challenges
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Philosophical Crisis
Political Crisis
Context – Social
A Conceptual Crisis in Economics & FinanceThe end of Neo-Liberalism- Economic centralisation- State centralisationA crisis in Western values & institutions????
Economic CrisisFinancial Crisis
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Context – Theoretical
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Structure-Context – Social & Theoretical-What is Complexity science?-So What?-The Political Economy
- Focus on: Efficiency versus Resilience- Focus on: the ‘Greek tragedy’
-Historical Perspective-Challenges
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What is Complexity Science?A complex system is:made up of a numberof potentially unique agentsthat interact with and adapt to each otherover time. Alternatively: an “evolving network”.A Social System is a type of Complex System!
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What is Complexity Science? An Evolving Network
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• Emergence• Self-
Organization• Co-evolution• Global
Cascades• Attractor
• Edge of Chaos• Phase Transitions• Autopoiesis• Autocatalysis• Downward
Causation
• Bifurcation• Dissipative
System• Non-Linear• Whole Systems• Ergodic• Fractal
What is Complexity Science?A look inside the toolbox…
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What is Complexity Science?
Ergodic. A system that contains the same, non-evolving properties, or laws.
Emergence. Macro-level phenomena that emerge from agent actions and local interactions.
Self-Organisation. Ability to create structure without any external pressures, an emergent property of the system.
Co-Evolution. Evolution of species, not only with respect to their environment, but also as to how they relate to other species.
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Structure-Context – Social & Theoretical-What is Complexity science?-So What?-The Political Economy
- Focus on: Efficiency versus Resilience- Focus on: the ‘Greek tragedy’
-Historical Perspective-Challenges
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The music download experiment
*Salganik, Dodds, Watts, ‘Experimental study of inequality and unpredictability in an artificial cultural market’, Science, 2006*Students downloaded previously unknown songs either with or without knowledge of previous participants' choices
So What?
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050
100
150
Number of downloads of each of the 48 songsNo social influence
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ds re
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ean
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So What?
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010
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0
Number of downloads of each of the 48 songsStrong social influence
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So What?
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010
020
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Number of downloads of each of the 48 songsStrong social influence
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050
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Number of downloads of each of the 48 songsNo social influence
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Policy Formulated ‘as if’ this were true!
It isn’t.This is true.
So What?
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Structure-Context – Social & Theoretical-What is Complexity science?-So What?-The Political Economy
- Focus on: Efficiency versus Resilience- Focus on: the ‘Greek tragedy’
-Historical Perspective-Challenges
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Bala
nce
of
Powe
r
CEO / Minister
Implementation
Snapshot of political economy today
Decis
ion
Mak
ing
Society: idiosyncratic, evolving, unpredictable
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What should it look like?
Society: idiosyncratic, evolving, unpredictable
Governance :
LearningSelf-OrganisationLegitimateEnabling
“Mass-Micro” decisions
“Macro” decisions
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Structure-Context – Social & Theoretical-What is Complexity science?-So What?-The Political Economy
- Focus on: Efficiency versus Resilience- Focus on: the ‘Greek tragedy’
-Historical Perspective-Challenges
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Focus on: Resilience versus Efficiency
After Bernard Lietaer 2010
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Structure-Context – Social & Theoretical-What is Complexity science?-So What?-The Political Economy
- Focus on: Efficiency versus Resilience- Focus on: the ‘Greek tragedy’
-Historical Perspective-Challenges
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Focus on: Financial ‘Turmoil’Greek debt, political turmoil Financial theory based on the NPV of knowable
futureBut reality is different:
Investment managers choose between multiple narratives (David Tucket). Sentiment is emergent.
The future is determined by the present and the present is determined by the expected future. Both at the same time: reflexivity & time-consistency.
Policy implications? fundamental re-think of political economics Subsidiarity, social democracy, legitimacy, less of
the ‘political elite’
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Structure-Context – Social & Theoretical-What is Complexity science?-So What?-The Political Economy
- Focus on: Efficiency versus Resilience- Focus on: the ‘Greek tragedy’
-Historical Perspective-Challenges
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Natural Sciences
Social Sciences
• Industrial Revolution• Enlightenment• Renaissance• Reformation
A New Enlightenment?
• New Media• Transparency• Complexity
Science
Historical Perspective
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Structure-Context – Social & Theoretical-What is Complexity science?-So What?-The Political Economy
- Focus on: Efficiency versus Resilience- Focus on: the ‘Greek tragedy’
-Historical Perspective-Challenges
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Challenges- Mis-match between education / framing of most
policy-makers and how the world actually works- It is not: non-changing, deterministic, universal
principles- It is: changing, inherently uncertain, idiosyncratic
- Challenge 1 - Making sense of the problem terrain:- Emergence; non-ergodic; idiosyncrasies; inter-
dependence; feedback effects……- Challenge 2 - “Solutions”: the “So What” question?
- Tricky issue – silver bullets in idiosyncratic, non-ergodic systems?
- Synthesis – engagement with public policy community
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Projects- Non-Equilibrium Social Science (NESS) from Nov 11- eGovPoliNet from Sep 11- FuturICT possibly from 2013 – huge project
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"We can't solve problems by using the same kind of thinking we used when we created them.”Albert Einstein