Complexity and Sustainability

I am currently learning a bit about complexity. I am just starting, so if you are already well read about complexity, you will most likely not benefit.

As discussed in another blog post (The future of work, 2018), I believe we are facing enormous challenges and should be happy for every worker set free, including those set free by digitization. Every financial, insurance, bureaucratic, production, or construction job that artificial intelligence and robots can pick up, should make us happy.

This often relates to complexity. Every opportunity to make our society simpler, less complex, more direct, through online processing, a single government portal rather than 100s of forms and offices, through mobile device integrating the functionality of dozens of older devices, or through new taxation and insurance systems (e.g. replacing complex, bureaucratic and humiliating social security constructions with basic income), should receive a warm welcome.

At least in an ideal world.

In an ideal world, all of this would release resources (like workers, capital, infrastructure) from working on maintaining an untenable past and allow them to design and implement the necessary sustainable future, with renewable energy, circular economy, and growth in the quality of life rather than the growth of waste production. I do not think that we need a revolution. If we change taxation to make costs reflect damages of activity to future generations (“internalize external costs”), our vibrant and innovative socio-economy could roll out innovative solutions. Many of these already exist. I believe that, at least in part, complex regulations and complex counter-rational taxes and subsidies prevent much of this.

So let us do away with all the old complexities, destroy them and make room for something new, right? I am afraid not. This might be happening, but we should strive at almost all cost and effort to avoid this dangerous, seductive solution, which will most likely bring incredible suffering and death with it. Such “simple solutions” are what Trump, Brexit, the extreme right in Europe are thriving on. It is what convinced, after perceiving a failure of their new democratic systems in the 1920s and 1930s, the Germans, Spanish, and Italians to vote their respective fascists into power. (I hope to find time to read a related book in German: Felix Ekardt 2017. Kurzschluss. Wie einfache Wahrheiten die Demokratie untergraben.)

One interesting thinker on the relation of cost, complexity, and sustainability is Joseph Tainter. In
Tainter (2006, also video of talk), he states:
1. “Sustainability is an active condition of problem-solving, not a passive consequence of consuming less.”
2. “Complexity is a primary problem-solving tool, including problems of sustainability.”
3. “Complexity in problem-solving is an economic function, and can reach diminishing returns and become ineffective.”
4. “Complexity in problem-solving does its damage subtly, unpredictably, and cumulatively over the long term. Sustainability must, therefore, be a historical science.”
5. “Sustainability may require greater consumption of resources rather than less. One must be able to afford sustainability.”
6. “The members of an institution may resort to resiliency as a strategy of continuity only when the option of sustainability is foreclosed.”
7. “A society or institution can be destroyed by the cost of sustaining itself.”

I concur with much of this. Fighting unsustainable behavior with a host of individual regulations and rules, new oversight institutions, etc. increases societal expenses without necessarily yielding efficient, innovative solutions. And point 5 is head on in the sustainability debate: Not only is it hard to accept a less complex, less resource-intensive society, but in many cases we try to solve sustainability problems by adding complexity, resource, and energy expenses.

On the other hand, we are engaged in reducing complexity. Like replacing dozens of individual technologies with convergent technologies like the web or the smartphone. Like introducing shallower management structures, revising regulations with the aim of simplification.

Tainter himself has a second set of seven points for coping with complexity:
1. “Be aware” of the problem of complexity.
2. “Don’t solve the problem.”
3. “Accept and pay the cost of complexity.”
4. “Find subsidies to pay costs.”
5. “Shift or defer costs.”
6. “Connect costs and benefits.”
7. “Recalibrate or revolutionize the activity.”

The first three points are much debated in politics and business. Think health and safety regulations. Or, in Europe, think EU regulations. Point 4 and 5 are really subdivisions of point 3 (“pay!”).

Point 6 is more interesting. It is a weakness of our political systems that we have no clear “regulation-and-bureaucracy-cost” accounting. We analyze a problem and may even assess the public cost of it. But then we create taxes, rules, regulations without truly assessing their cost. I believe doing that would often enable us to rescind, perhaps only in part, some of the regulatory spider nets that threaten to suffocate or immobilize our society. Tainter writes: “information about the cost of complexity must flow accurately and effectively. Yet, in a hierarchical institution, the flow of information from the bottom to the top is frequently inaccurate and ineffective.” True. I cannot think of any institution who truly manages this well. Can someone point out examples in the comments?

Tainter himself mentions, albeit in passing, that such accounting needs to be accurate with respect to externalized costs, i.e. costs that society or future generations will have to bear.

Point 7, “Recalibrate or revolutionize the activity” refers to the (rare) options where through social or technological innovation one type of complexity can be exchanged for another, less costly one. Like using fossil fuel energy and machines instead of slavery, new agricultural processes, or the digital information revolution. Here we are in the middle of the digital revolution and perhaps thinking about the sustainability revolution.

(I also read Tainter (2011), which I personally found less helpful for my thinking; see also Alexander (2012) on Tainter (2011).)

So far and incomplete. My own thoughts at the moment are:

1. I agree with Tainter that management of complexity is important and often undervalued. We will not achieve sustainability through business-as-usual, by simply throwing more and more complexity in the form of bureaucracy and institutions at problems.

2. I do not share his pessimistic worldview. We can indeed get sufficient renewable energy to operate even more complex, even more energy intensive societies. Foremost, we can improve and find new, different solutions. A correlation between societal, organizational, or technological progress and increased complexity is plausible. However, there are also developments that are fundamental game changers. Clearly, these are rare: If among 1000 sustainability problems, game changers instead of increased complexity could solve 10, the effect would be negligible. However, solutions interact. Some examples:

• Having better-educated children, with better learning and problem-solving strategies, with global open-access to information, and with a better understanding of human strengths, weaknesses, and diversity, creates a new playing field.
• Even where new solutions do depend on increasingly complex technologies, they often replace laborious, cost- and energy intensive older solutions. For example, genomic genetics coupled with modern gene-manipulation-tools like CRISP/CAS9 has the potential to offer simple solutions for important problems, problems that might have been unsolvable in a complex, traditional plant breeding industry.
• Similarly, if a small number of more complex systems can be applied to a broader range of problems, the overall costs may be reduced. Internet technology has or is replacing a host of older, dedicated communication technologies. Or, a smartphone is undoubtedly a much more complex solution than any classical phone, compact digital camera, dictaphone, music player, video player, eBook reader, navigation device, personal computer, electronic calculator, remote control, payment device. But since a smartphone already has or is likely to replace most of these other devices, the overall cost is reduced.
• Adding complexity at the right points can reduce overall complexity and cost. What, if we establish a sustainability accounting office which calculates the internal and externalized costs (including those damaging the environment) of private, commercial, and governmental activities? This should in include accounting for the cost of regulatory complexity, connecting the cost and benefit of complexity. With a strong mandate, it could provide the necessary data to increase complexity where needed for sustainability, while reducing complexity elsewhere.

4. I have doubts that the historical perspective, like studying the collapse of the Roman Empire or other cases of societal collapse or failure, is the best perspective. It is suggestive and useful to create hypotheses, but by no means proves causality. I would like to read more contemporary studies. Studies on national economies, businesses, ecosystem management that relate success, complexity and cost. One could even experiment – perhaps in a framework of adaptive resource management.

5. (Minor:) I believe Tainter is wrong when he writes “attempts to broaden economic theory by incorporating environmental costs and subsidies are also an attempt to connect the costs and benefits of complexity (p. 100)”. Internalizing externalized costs to the environment and future generations are NOT primarily about complexity. In fact, I believe Pigovian taxes are an attempt to solve this problem on a much lower complexity level than bureaucratic regulations – in part by re-purposing a complex system, which already exists. Making the tax system dual-use is in my opinion a very smart solution, a game changer.

6. Finally, Tainter may underestimate the opportunities which arise from independently developed solutions. Tainter’s thinking seems to be based on a non-diverse, fully globalized world. I believe that wherever we have a diverse ecosystem of solutions, one strategy of coping with the cost of complexity (and the ensuing resource and energy expenditures which may hamper a sustainability transformation), should be to carefully analyze differing solutions and their advantages. Different organizations, countries, cultures, can learn from each other. Even better: Societies should willfully support independent experiments in subdivisions, regions, start-up companies and learn from the solutions found. This depends on point 6, accounting, but is more.
For example, I find it a heartening story that poorer countries, with less complex bureaucracies, invent new means of doing the same with less. Like financing and money transfer solutions based solely on mobile phone technology; without complex banking systems involved. These solutions may help the rich, developed countries, to simplify their own system.
We need experiments on the right scale. Not isolated, artificial and overfunded pilots. But we should encourage testing a diversity of ideas and study which solutions reduce our footprint or increase our well-being within the sustainability envelope. Once we can measure solutions, we can appreciate them. We should further enable and encourage experiments on a sufficiently complex segment of society (e.g., a whole city, a province of federal state) to find new solutions with lower energy and resource expenses.

(I thank Rob Stevenson for our good discussions about this topic!)

References and further reading

Alexander, Samuel 2012. Resilience through Simplification: Revisiting Tainter’s Theory of Collapse (Simplicity Institute Report, 12h, 2012). http://simplicityinstitute.org/wp-content/uploads/2011/04/ResilienceThroughSimplificationSimplicityInstitute.pdf through http://simplicityinstitute.org/publications

Tainter, Joseph A. 2006. Social complexity and sustainability. Ecological Complexity 3 (2006) 91–103. Much of the talk is also in a talk by Tainter on youtube, see especially here https://www.youtube.com/watch?v=BgeP_NTCs_Q at 9:00.

Tainter, Joseph A. 2011. Energy, Complexity, and Sustainability: A Historical Perspective. Environmental Innovation and Societal Transitions 89.

Wikipedia article on a paper by Tainter from 1996: https://en.m.wikipedia.org/wiki/Complexity,_Problem_Solving,_and_Sustainable_Societies

Some other reading:

Peter Turchin: http://peterturchin.com/

Gunderson, L. H., and C. S. Holling, editors. 2002. Panarchy: understanding transformations in human and natural systems. Island Press, Washington, D.C., USA.

Gotts, Nicholas M. 2007. Resilience, panarchy, and world-systems analysis. Ecology and Society 12(1): 24. [online] URL: http://www.ecologyandsociety.org/vol12/iss1/art24/

See also Stunning charts on the rise of manufacturing complexity, http://activism101.ning.com/profiles/blogs/stunning-charts-on-the-rise-of-manufacturing-complexity (on ECI, https://en.wikipedia.org/wiki/Economic_Complexity_Index)