ECON: What Complexity Theory Can Teach Business

From: J. R. Molloy (jr@shasta.com)
Date: Wed Sep 05 2001 - 11:27:02 MDT


On the adaptive landscape of economics
http://www.strategy-business.com/technology/96207/page5.html
Sure, writes Mr. Kauffman in his new book, we can't understand every detail of
evolution, every reason behind every part of every species. Remember the
butterfly effect. "We must instead simply stand back and watch the pageant,"
he advises. Beneath the details, he writes, can be "deep and beautiful laws
governing that unpredictable flow." Many "features of organisms and their
evolution are profoundly robust and insensitive to details," he argues.

Maybe so, but in science, as in management, there is always a rival strain.
Some people delight in detail. They will fight generalization as an effort to
throw the baby out with the bathwater. A law broad enough to explain sandpiles
and corporations and starfish, they will argue, will have the sandiness and
corporate culture and starfishiness (Abstract)ed out of it, so that it says
nothing important. One of the most extreme examples of this kind of scientific
mind was probably Dr. Alfred Kinsey, who was a student of wasps before he
turned to human sexuality. Asked what he could say about the wasp in general,
after decades in which he had examined hundreds of thousands of different
insects, he replied that he hadn't yet seen enough specimens to generalize.

The detail people are not always wrong. As with all intellectually alluring
fads, complexity theory is in for a backlash, and it may have already started.

In its June 1995 issue, for instance, Scientific American asked, "Is
Complexity a Sham?" Building on a paper published in Science in 1994,
Scientific American's veteran writer John Horgan argued that the main tool
used by complexologists--the computer simulation--is an inherently flawed
method for understanding the world.

The paper, by the philosopher Naomi Oreskes and two colleagues, argues that
because our knowledge of "real world" phenomena will always be partial, we can
never verify with certainty that a computer model represents the world. Mr.
Horgan, noting that some scientists have given up on the chaos and complexity
hype, argues that complexity may join catastrophe theory, cybernetics and
information theory on the ash-heap of ideas that, whatever their utility in
their own spheres, were once touted as all-powerful explanations.

Not entirely convinced, but interested, a number of the leading research
consulting firms are looking into complexity's possibilities.

Mr. Kauffman himself acknowledges the skeptics. "The consulting community is
filled with fad after fad," he says. "You have to use caution, because this is
a new science. Whenever humanity invents a new widget, we try to apply it to
everything. Then things settle down and it gets used for what it's appropriate
for. They tried foxglove as a cure for everything before they settled down to
using digitalis for heart disease."

But whatever complexity's long-term legacy turns out to be, the skeptics have
some explaining of their own to do if they mean to turn the tide of opinion
this early in the game. Just what do they make of the success of the
hardworking paint booths of Fort Wayne, Ind.?

-----------------------------

Useless hypotheses, etc.:
 consciousness, phlogiston, philosophy, vitalism, mind, free will, qualia,
analog computing, cultural relativism, GAC, Cyc, Eliza, cryonics, individual
uniqueness, ego



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