Unlocking the Deadbolt

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Complexity Economics

So let me just say that I have hardly done justice to explaining core economics. There is just so much, that it is not possible for me to sufficiently cover everything to the base of economics in one blog post. But nonetheless, I have faith that I have covered what is absolutely necessary to move onto some more heavy stuff. For just for a simple taste of what it looks like, below is a CT system defined at Wikipedia.

A complex system is a damped, driven system (for example, a harmonic oscillator) whose total energy exceeds the threshold for it to perform according to classical mechanics but does not reach the threshold for the system to exhibit properties according to chaos theory.

Wow! Okay so if you aren’t familiar with CT, do not worry. Basically, in layman’s terms, all this says is that a complex system is one that has too much energy to adhere to the universal laws, but not quite enough energy to go into a spiraling, out of control, outcome. Now this isn’t the exact definition that I want to use for CT so let’s look specifically into that. Again Wikipedia, but this time for a definition of Complexity Economics (CE).

Complexity economics is the application of complexity science to the problems of economics. It studies computer simulations to gain insight into economic dynamics, and avoids the assumption that the economy is a system in equilibrium.

Alright this definition is far more useful in that it recognizes and harnesses the dynamic nature of markets. It notes that the math to fully apply complexity economics to real world problems is far beyond the ability of a human to perform, but with the development of computers, calculations and simulations are now possible. It is important to note that the complexity framework has no general model, but instead a general vision in that the economy is an evolving complex system that requires contextually-appropriated policy applications. Complexity theory emphasizes continuing patterns, organizational methods, contextually-based analysis, fluid social norms, evolving conditions, tipping points, increasing and decreasing returns, ordering principles, time frames, and even more of which all culminate to allow the complete system to always be unfolding, or in other words, dynamically changing. Again, a complex system is one where many parts are interacting in a variety of multifaceted ways in which new, ordered properties will emerge.

This is not to be confused with complicated or chaotic. Complicated systems exist, when parts are doing different things and these operations are in a sense difficult to understand. Complicated is much more mechanical in a sense. Chaotic systems occur when many interacting parts come together and emerge into an scattered, spiraling, uncontrollable outcome. It’s like an overcharged complex system.

If you would like to read a nice easy book on Complexity and Public Policy, check this out.

Here is my page devoted to the concepts that comprise CE.

So what are some examples of these concepts at work? Let’s cover some complexity frame stories.

For instance, take a very basic example of the “continual, lock-in pattern” concept of CT. QWERTY is a design of a keyboard layout, the default positioning of keys on a keyboard. The layout became quite popular in the late 1800s due to the success of a typewriter utilizing the layout. The QWERTY layout served to combat the problem of bars colliding, and subsequently jamming, during the typewriter’s use. If keys resting beside each other were pressed too quickly, the typewriter would jam. The other advantage of QWERTY was to boost typewriter sales by having the keys positioned in a seemingly nice fashion for demonstration.

Today, none of the advantages of QWERTY matter today, rendering them obsolete. Yet, the vast majority of typists, including myself, still use QWERTY. Another typing layout, known as DVORAK, is optimized for efficiency in typing and can save vasts amount of time. Why is QWERTY used so much more often than DVORAK? Complexity theory would argue that because QWERTY was adopted by a wide audience initially, the costs of switching to better modes of typing could not overcome the original lock-in of the technology. For more on the matter, see this.

Let’s consider another concept of CT, bottom-up spontaneous order and dynamic self-organization, which are manifested in the idea of Monderman’s Shared Space. The idea is that by designing a public area, e.g. a road or junction, in a certain fashion, one can influence the behavior of the interactive agents to naturally produce a safer environment. There have been numerous projects in the Scandinavian region of Europe as well as some other countries with relative success, although in some cases, just short of failure.

One more example of CT is in the famous essay of I, Pencil. This essay portrays the unbelievable level of sophisticated organization in order to make a seemingly simple pencil. Supply-chains come together to form enormous operations from gathering raw resources, shaping them into materials, and forming the quite ubiquitous pencil. You can check this out this in further detail at Wikipedia as well.

Also below is a great video on the concept.

Schrodinger’s cat illustrates some interesting stuff related to CT. You know the idea from quantum physics that the cat can be both dead and alive, at least until it’s been observed. Pretty Cool stuff…

1995px-Schrodingers_cat.svg

Schrodinger’s Cat Depiction

Anyways, again I want to emphasize the similarity that FAM has to economics’s Complexity Theory. I’ll talk more about this later, where I’ll will cover interesting examples of complexity theory such as I, Pencil or Monderman’s shared space ideas. As compelled as I feel to share on the concepts now, I will hold off because of the exorbitant length this post already has.

Julia_set_(chartreuse)

Julia Set of Self-Replicating Patterns: An Artistic Depiction of Complexity Theory

So what does policy within the Complexity framework look like versus Policy in the Standard Economic model?

Basically, the complexity framework sees both the market and the government as evolving institutions that have different advantages and disadvantages, but neither is inherently bad.


So now let me end by saying that when I discuss Functional Approach Methodology (FAM), I am largely generalizing Complexity Theory and using it outside of its traditional application of policy. Instead, I am terming it FAM and applying it to religion and morality.

“Simplicities are enormously complex. Consider the sentence “I love you”.”
– Richard Moore

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One comment on “Complexity Economics

  1. Pingback: #2 The Functional Approach Methodology – Where Does Meaning Come From? | Hyperoptivity: Discussions on Religious Pattern

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