Re: L. A. Times column, October 12, 1998

Bernard Robertson-Dunn (brd@dynamite.com.au)
Mon, 19 Oct 1998 09:54:05 +1000

Karin Geiselhart wrote:
>
> Following Paul's comments:
> >It should be abundantly clear that ER isn't remotely useful in
> describing,explaining or remedying the current global economic flux.
> >
>
>
> Recent management strategy uses complexity theory to show that
> human orgs are subject to similar laws as other complex adaptive
> systems. Economic rationalism is based on an equilibrium model,
> and uses negative feedback to maintain stability. But complex
> adaptive systems in(human)nature have lots of positive feedback
> which are deterministic but not predictable in detail. (like the
> weather)
>
> These systems cannot be controlled, but thrive on the creativity
> that comes from being far from equilibrium. The top down, IMF as
> saviour model cannot work because it suppresses adaptive
> self-organisation.
>
> Complexity theory partly grew from recognition that classical
> economic theory was inaccurate and Newtonian, but the world is
> non-linear. The Internet arose from such forces, and trying to
> subsume it into an outdated hierarchical growth-as-forecast
> model is no doubt counter-productive in the longer term.

The crucial point here is that such systems are unpredictable, often
in the large scale, never mind in detail. They are also
uncontrollable.

In times of low interest rates and low inflation internationally,
for our politicians to claim that they are excellent economic
managers because they have achieved low interest rates and low
inflation is exaggeration at best and self delusion at worst.

A DOFA officer once told me that government exists to correct market
failures. Unfortunately, government is often responsible for market
failure. But politicians must always be seen to be doing something -
doing nothing is not an option.

-- 
I'll tell you what I think, after 25 years in the government: I
don't think ANYBODY'S in charge. I think it started out OK, 200
years ago, when the country was young, and the population was small.
But now, I think the whole damned thing is just too big -- too big
for any one person to understand it, much less control it.


The whole government's out of control, and the people who work for
it are just doing their jobs, collecting their paychecks, and going
along for the ride. It's like the government is a huge gumball,
rolling down a hill, and we're like ants clinging to it, sucking up
the sugar as it rolls.
-- FBI agent, quoted by Rob Wood.


Regards
brd


Bernard Robertson-Dunn
Canberra Australia
brd@dynamite.com.au