No 123, Posted by fw, February 24, 2011
“There are no simple answers to ensuring a prosperous future. But we do need one thing, and that’s that we need an adult conversation. And that is what we lack in this country. We certainly lacked it in the recent election. In fact we lack it in every election. Our political system is dysfunctional. They do not operate as adults. And we, the electorate, have allowed them to get away with it. Joseph Tainter, November 2010
In Part 6, We can’t innovate our way to a sustainable future, Dr Tainter’s evidence led to the inescapable conclusion that technological innovation has reached the point of diminishing returns: “We can continue innovation only by taking resources from other major sections of the economy — for example, health care, defense, transportation, and infrastructure.”
I’m focusing this post, Part 7, on Tainter’s look into the future, the challenges of “converging problems”, the dilemma of problem solving, alternative problem solving options, and his seven strategies for coping with complexity. Having reviewed the predicament that contemporary societies face, he closes his presentation with a question: What do we need to do? As in Part 6, I have drawn selectively from YouTube’s 5-part video series, Why societies collapse and what it means to us.
Here is Tainter’s list of major challenges that will converge over the next 20 to 30 years. The fact that these stresses will converge almost simultaneously compounds the gravity of the situation:
- Funding retirements for the Baby-Boom generation;
- Continuing increases in health care costs;
- Replacing decaying infrastructure;
- Adapting to climate change and repairing environmental damage;
- Developing new sources of energy;
- Continuing high military costs (particularly for the U.S.); and
- Increasing costs of innovation.
What these problems have in common
- They will converge over the next 20 to 30 years, perhaps over the next 10 to 30 years or so;
- Individually, any one of these problems would be tractable, but converging at once, more or less simultaneously, they present major fiscal challenges;
- One of the disturbing aspects of addressing these problems is that solving them seems to generate no new wealth;
- Just to maintain the status quo, we must solve these problems; and
- Increasing complexity and the costliness of maintaining the status quo are precisely what undermined the Roman Empire.
The problem solving dilemma we are facing
- We will have to address these converging problems as a time when: (a) net energy will be declining and energy will be more expensive, taking a larger share of household budgets; and (b) innovation will continue to decline in productivity making it less able to generate new growth or produce increased technical efficiency;
- Problems are inevitable; therefore, the process of increasing complexity is inexorable;
- Increasing complexity produces increasing costs and diminishing returns;
- When problems emerge, the cost of solving them usually appears acceptable. The damage comes from cumulative costs; and
- Societies become vulnerable to collapse through the mundane process of solving problems.
Leadership and collapse
- Political leaders generally attempt to solve societal problems;
- Everything the Roman emperors did was a logical response to circumstances. Without these steps the Empire would have collapsed sooner; and
- Decision making sets in motion long-term consequences that may result ultimately in catastrophe.
Tainter’s seven strategies for coping with complexity
Tainter’s study of social complexity does not yield optimistic results. However, he emphasizes that complexity is not inherently detrimental. He offers seven strategies for coping with complexity in his 2005 paper, Social complexity and sustainability:
- Be aware: Complexity is most insidious when key decision makers are unaware of what causes it. It is particularly important to understand that unsustainable complexity may emerge over periods of time stretching from years to millennia, and that cumulative costs bring the greatest problems;
- Don’t solve the problem: Not solving problems is a strategy that is rarely adopted. Yet often we do choose not to solve problems either because of their cost or because of competing priorities;
- Accept that there is a problem and pay the cost of complexity: Governments often pay the cost of problem solving by increasing taxes, and businesses by increasing prices. Paying the true, ongoing cost of complexity can generate high levels of conflict, including taxpayer and consumer rebellion;
- Find subsidies to pay the costs: Nations did this when they colonized or conquered foreign lands. Industrial and post-industrial societies subsidized rapid economic growth with cheap, easily accessible fossil fuels. Anxiety over future energy supplies is not just about maintaining a high standard of living, it also concerns our future problem solving capacity;
- Shift or defer the costs: This is one of the most common ways to pay for complexity. Budget deficits, currency devaluation, and borrowing or externalizing costs are widely practiced. It is a strategy that can work only for a time. When it is no longer feasible, the economic repercussions may be far worse than if the costs had never been deferred;
- Connect / reconnect costs and benefits: In order to control complexity, costs and benefits must be connected so explicitly that the tendency for complexity to grow can be constrained by its costs. This means that information about the cost if complexity must flow accurately and effectively. But all too often the flow of information from the bottom to the top of a hierarchical institution is frequently inaccurate and ineffective. As a result, managers tend to be very poorly informed about the costs of complexity; and
- Recalibrate or revolutionize the activity: This involves a fundamental change in how costs and benefits are connected, and is potentially the most far-reaching technique for coping with complexity. Fundamental changes of this sort are rare and depend on opportunities for positive feedback, where system elements reinforce each other. For example, Watt’s steam engine facilitated the mining of coal by improving the removal of ground water from the mines. Cheaper coal meant more steam engines could be built and deployed, facilitating the production of even cheaper coal.Combine coal, steam engines, and railroads, and we had most of the components of the Industrial Revolution, all mutually reinforcing each other. The economic system became more complex, but the complexity involved new elements, connections, and subsidies that produced increasing returns.
What do we need to do?
Tainter is very candid in answering this question:
“There are no simple answers to ensuring a prosperous future. But we do need one thing, and that’s that we need an adult conversation. And that is what we lack in this country. We certainly lacked it in the recent election. In fact we lack it in every election. Our political system is dysfunctional. They do not operate as adults. And we the electorate have allowed them to get away with it. So here are some of the things I think we need to have an adult conversation about“:
- Will household wealth grow in the future as it has in the past? What are the consequences if it doesn’t grow?
- What are we going to do about energy? We need alternatives to fossil fuels and we need to scale up on a massive scale and very quickly.
- Will we be facing an economy in a steady state or in decline? “There are people who advocate what’s called a steady state economy. I am not one of them. I don’t advocate a steady state economy. But the results of the innovation research made me wonder if in fact that might be what we’re heading for. And a steady state economy, I think, would have repercussions in employment levels, in wellbeing, in popular discontent that would not be desirable.”
- Do we want to pay the cost of solving our problems?
Watch the 1 hour, 10 minute video of Dr Tainter’s 2010 Conference presentation here –