Social Complexity, Public
Policy and Subsidiarity
Presentation to IES on 21 September 2011
Greg Fisher
Managing Director, Synthesis
greg.fisher@synthesisips.net
My 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
"We can't solve problems by using the same kind
of thinking we used when we created them.”
Albert Einstein
- 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
Economic Crisis
Financial Crisis
Political Crisis
Philosophical Crisis
A Conceptual Crisis in Economics & Finance
The end of Neo-Liberalism
- Economic centralisation
- State centralisation
A crisis in Western values & institutions????
- 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
A complex system is:
made up of a number
of potentially unique agents
that interact with
and adapt to each other
over time.
Alternatively: an “evolving network”.
A Social System is a type of Complex System!
• Emergence
• Edge of Chaos
• Bifurcation
• Self-Organization
• Phase Transitions
• Dissipative System
• Co-evolution
• Autopoiesis
• Non-Linear
• Global Cascades
• Autocatalysis
• Whole Systems
• Attractor
• Downward
Causation
• Ergodic
• Fractal
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.
Ergodic. A system that contains the same, non-evolving
properties, or laws.
- 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
*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
150
100
50
0
Downloads relative to the normalised mean of 100
Number of downloads of each of the 48 songs
No social influence
300
200
100
0
Downloads relative to the normalised mean of 100
Number of downloads of each of the 48 songs
Strong social influence
50
100
150
Policy Formulated ‘as if’
this were true!
0
Downloads relative to the normalised mean of 100
Number of downloads of each of the 48 songs
No social influence
300
200
100
0
Downloads relative to the normalised mean of 100
Number of downloads of each of the 48 songs
Strong social influence
It isn’t.
This is true.
- 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
Implementation
Balance of Power
Decision Making
CEO / Minister
Society: idiosyncratic,
evolving, unpredictable
“Macro” decisions
Governance :
Learning
Self-Organisation
Legitimate
Enabling
“Mass-Micro” decisions
Society: idiosyncratic,
evolving, unpredictable
- 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
After Bernard Lietaer 2010
- 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
 Greek debt, political turmoil
 Financial theory based on the NPV of knowable future
 But 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’
- 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
• Industrial Revolution
• Enlightenment
• Renaissance
• Reformation
A New Enlightenment?
Social Sciences
Natural Sciences
• New Media
• Transparency
• Complexity Science
- 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
-
Mis-match between education / framing of most policymakers and how the world actually works
-
-
Emergence; non-ergodic; idiosyncrasies; inter-dependence;
feedback effects……
Challenge 2 - “Solutions”: the “So What” question?
-
-
It is: changing, inherently uncertain, idiosyncratic
Challenge 1 - Making sense of the problem terrain:
-
-
It is not: non-changing, deterministic, universal principles
Tricky issue – silver bullets in idiosyncratic, non-ergodic
systems?
Synthesis – engagement with public policy community
- Non-Equilibrium Social Science (NESS)
from Nov 11
- eGovPoliNet from Sep 11
- FuturICT possibly from 2013 – huge
project
"We can't solve problems by using the same kind
of thinking we used when we created them.”
Albert Einstein