A Complexity Manifesto

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A Complexity Manifesto

The following is a piece discussing the connection between Marx's dialectical analysis of capitalism and the inherent fragility of complex adaptive systems. Many people may find it to be somewhat controversial or offensive for whatever reason (especially those with libertarian inclinations), but I think most people on this site would find it to be an interesting analysis. If nothing else, its a decent primer on Marx's views about capitalism and a good test of how open one's mind really is. Here is an excerpt of the introduction:


"Every limit appears as a barrier to be overcome" - Karl Marx (describing the world through a capitalist’s eyes)

     There has been much debate since the global financial crisis of 2008 over what exactly happened and why. Some commentators believe that a period of deregulation in the financial sector, including the infamous repeal of Glass-Steagall (separating commercial and investment banking activities) [1], combined with reckless managerial decisions was the primary driver of a housing bubble, which led to a credit crunch and economic recession. Conservatives and libertarians tend to place the blame on government intervention in the housing and financial markets through Congressional legislation, such as the Community Reinvestment Act (putting pressure on banks to issue credit in low-income neighborhoods) [2], and the Federal Reserve's loose monetary policy (targeting low interest rates during the tech and housing bubbles) [3]. More creative analysts trace the problem back at least several decades to a global credit bubble which has continuously been supported by both private economic actors and public policies [4]. Despite the significant differences in the views of these various groups, there is an undeniable trend towards questioning economic dogmas previously thought to be fundamental and sound. Complexity theory provides a useful framework to view the inherent limits of our current economic system, which is now in the process of gradually breaking apart. It is especially insightful when applied to the dynamics of a global economy marked by capitalist relations of production.

     The abstract "rules" of complex adaptive systems can be nicely illustrated by describing how they operate in a familiar system, such as a capitalistic global economy. A description of capitalism would typically rely on the works of some of its earliest proponents, such as Adam Smith, David Ricardo or John Stuart Mill, but its dynamic nature has actually been captured extremely well by the works of Karl Marx, who is frequently said to have been wrong about communism and right about capitalism. Many people automatically associate Karl Marx with the Communist regimes of Stalin and Lenin in the Soviet Union, Mao’s China or Castro’s Cuba, and therefore they dismiss his ideas as those promoting corruption, injustice and a general lack of freedom. Leaving aside those unjustified connections, it is important to remember that a majority of Marx's writings dealt specifically with the dynamics of capitalism, and he was merely seeking to discover the new path that would emerge from what he viewed as an extremely oppressive and unsustainable economic regime. His primary goal was, in fact, to promote the freedom of human beings around the world so they could realize “the absolute working-out of [their] creative potentialities”.

     Before delving into the analysis of capitalism and complexity, the following disclaimer must be issued: The following descriptions of Karl Marx’s theories on capitalism are highly simplified, and certainly do not include the mathematics used to justify his conclusions. This piece also does not intend to imply that Marxian economic theory is perfect or that the dynamics he envisioned are entirely accurate. For example, the Australian economist Steve Keen has produced research questioning the validity of Marx’s labor theory of value (the criticism may actually follow from the logic of Marx himself) [5]. Instead of labor being the only source of surplus value in the production process, Keen suggests that all inputs to production (commodities and labor) can be a source of surplus value. This conclusion casts doubt on Marx’s assertion that the rate of profit for capitalists tends to fall solely as a function of limits to productive labor. However, these flaws in Marx’s analysis do not invalidate some of his more important insights into the dynamic (or “dialectical”) nature of a capitalist production system, and it is also true that other inputs (besides labor) have been depleted in an exponential fashion since his time. The key point of this paper is that there is a general intersection between the study of complex adaptive systems and the study of capitalism, and that the application of the former to the latter reveals certain inherent limits to our current global economic system.

Full article - http://peakcomplexity.blogspot.com/2010/09/complexity-manifesto.html

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