{"id":3675,"date":"2010-04-06T09:20:17","date_gmt":"2010-04-06T14:20:17","guid":{"rendered":"http:\/\/ssgreenberg.name\/PoliticsBlog\/?p=3675"},"modified":"2010-04-06T21:12:52","modified_gmt":"2010-04-07T02:12:52","slug":"the-collapse-of-complex-business-models","status":"publish","type":"post","link":"https:\/\/ssgreenberg.name\/PoliticsBlog\/2010\/04\/06\/the-collapse-of-complex-business-models\/","title":{"rendered":"The Collapse of Complex Business Models"},"content":{"rendered":"

Follow this link<\/strong><\/a> to the blog posting by Clay Shirky. I found the link to this item on the Facebook<\/strong><\/a> page of my friend RogerG.<\/p>\n

There is great food for thought about the role of complexity in the downfall of both businesses and civilizations.<\/p>\n

In the Shirky post, he discusses the book The Collapse of Complex Societies<\/em> written by Joseph Tainter and published in 1988.<\/p>\n

Tainter\u2019s thesis is that when society\u2019s elite members add one layer of bureaucracy or demand one tribute too many, they end up extracting all the value from their environment it is possible to extract and then some.<\/p>\n

The \u2018and them some\u2019 is what causes the trouble. Complex societies collapse because, when some stress comes, those societies have become too inflexible to respond. In retrospect, this can seem mystifying. Why didn\u2019t these societies just re-tool in less complex ways? The answer Tainter gives is the simplest one: When societies fail to respond to reduced circumstances through orderly downsizing, it isn\u2019t because they don\u2019t want to, it\u2019s because they can\u2019t.<\/p><\/blockquote>\n

Maybe this explanation is more understandable than the way I put it in electrical engineering terms. In the electrical engineering world there is something known as an operational amplifier.\u00a0 It has extremely high gain from the input to the output.\u00a0 It is also very unstable in its isolated incarnation. Engineers add negative feedback around the amplifier which cuts down on the gain, but adds stability and accuracy.\u00a0 So negative feedback is a good thing, but there is only so much gain in the original amplifier that you can trade for other good characteristics.<\/p>\n

I have always likened running the economy to this amplifier example.\u00a0 When allowed to run free, it produces tremendous wealth, but it is also susceptible to wild fluctuations.\u00a0 Put in some regulation, you give up a little wealth production, but you diminish the oscillations.\u00a0 If you go too far with regulation, you have no more wealth production and the system is economically stable around the poverty level.\u00a0 Though, at this point, it is probably not politically stable.<\/p>\n

\n

My friend RogerG thinks, <\/p>\n

\nIsn’t North Korea a counterexample? It’s been stable for decades despite all manner of destabilizing factors.<\/p><\/blockquote>\n

To further clarify his comment, he added:<\/p>\n

\nMy comment referred to this text in your blog: “If you go too far with regulation, you have no more wealth production and the system is economically stable around the poverty level. Though, at this point, it is probably not politically stable.”\n<\/p><\/blockquote>\n

Which brings me to comment on the feedback analogy as applied to the political system for this example. Allowed to run free, the political system operational amplifier<\/q> would be unstable. Put in massive negative feedback of a million man army to suppress dissent and you can have stability<\/q> in the political system.<\/p>\n

However, what you see is the adding of more and more complexity in every domain. This is also a perfect example of the inflexibility brought on by this complexity. The book by Joseph Tainter was an archaeological study. Decades of time in the Korean example is not much time on an archaeological scale. <\/p>\n","protected":false},"excerpt":{"rendered":"

Follow this link to the blog posting by Clay Shirky. I found the link to this item on the Facebook page of my friend RogerG. There is great food for thought about the role of complexity in the downfall of both businesses and civilizations. In the Shirky post, he discusses the book The Collapse of […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[166],"tags":[],"class_list":{"0":"post-3675","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-stevegsposts","7":"czr-hentry"},"_links":{"self":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/3675","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/comments?post=3675"}],"version-history":[{"count":5,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/3675\/revisions"}],"predecessor-version":[{"id":3704,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/3675\/revisions\/3704"}],"wp:attachment":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/media?parent=3675"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/categories?post=3675"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/tags?post=3675"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}