Can Joseph Tainter save us from ourselves? Pt 7/7: Seven strategies for coping with complexity

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.

Converging problems

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:

1. Funding retirements for the Baby-Boom generation;
2. Continuing increases in health care costs;
3. Replacing decaying infrastructure;
4. Adapting to climate change and repairing environmental damage;
5. Developing new sources of energy;
6. Continuing high military costs (particularly for the U.S.); and
7. 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:

1. 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;
2. 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;
3. 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;
4. 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;
5. 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;
6. 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
7. 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 –

Can Joseph Tainter save us from ourselves? Pt 6/7: We can’t innovate our way to a sustainable future

No 122 Posted by fw, February 22, 2011

“In the year 2054, the entire [U.S.] defense budget will purchase just one aircraft. The aircraft will have to be shared by the Air Force and Navy 3½ days each per week except for leap year, when it will be available to the Marines for the extra day.” Norman Ralph Augustine, Augustine’s Laws (1983)

“The chief cause of problems is solutions.” Eric Sevareid, CBS news journalist

In Part 5, Fossil fuels give Industrial Revolution sustainable problem solving system, Dr Tainter explained how industrialized societies of the 18^th and 19^th centuries avoided collapse in spite of their rapidly increasing complexity and signs of diminishing returns. Abundant, easily accessible fossil fuels, beginning with coal and later with oil, made industrialism a sustainable system of innovative problem solving.

The first five posts in this series featured extracts from Dr Tainter’s 1996 paper, Complexity, Problem Solving and Sustainable Societies. As a memory aid, here is Tainter’s overview of the thesis of this paper:

Historical knowledge is essential to practical applications of ecological economics. Systems of problem solving develop greater complexity and higher costs over long periods. In time, such systems either require increasing energy subsidies or they collapse. Diminishing returns to complexity in problem solving limited the abilities of earlier societies to respond sustainably to challenges, and will shape contemporary responses to global change. To confront this dilemma we must understand both the role of energy in sustaining problem solving, and our historical position in systems of increasing complexity.

In this post, Part 6, I turn to a 2010 source, Why societies collapse and what it means to us, a 5-part YouTube video recording of a paper that Dr Tainter delivered as the keynote speaker at the 2010 International Conference on Sustainability: Energy, Economy and Environment, November 2010, Prince Conference Center, Grand Rapids, Michigan. In his 2010 presentation, Tainter departs very little from the thesis of his 1996 paper, continuing his focus on complexity, problem solving, and sustainability.

Choosing selectively from YouTube’s videos of Tainter’s 2010 Conference presentation, I focus this post on his explanation of why we won’t be able to innovate to a sustainable future. I begin with a review of Tainter’s seven sustainability lessons — after all, maintaining sustainability is the driving force behind technological innovation.

Tainter’s seven sustainability lessons

1. Sustainability is an active condition of problem solving, not a passive consequence of consuming less. A society has to have resources to solve problems. If we all drive hybrid cars, take colder showers, use public transportation, grow local food and so forth and so on, we’ll NOT become sustainable. Conservation alone does not produce sustainability.
2. Complexity is a problem solving tool, including the problems of sustainability;
3. Complexity in problem solving is an economic function with benefits and costs, and complexity and problem solving can reach diminishing returns and become ineffective;
4. Sustainability may require greater consumption of resources not less. If you understand that sustainability is a function of problem solving, sustainability may actually require greater consumption of resources, not less. Societies must be able to afford sustainability. (This is one of the really hard sustainability lessons to swallow);
5. Complexity in problem solving does its damage subtly, unpredictably, and cumulatively over the long term. Sustainability therefore demands an historical perspective;
6. The members of an institution may resort to resiliency as a strategy of continuity only when the option of sustainability is foreclosed; and
7. A society or other institution can be destroyed by the cost of sustaining itself.

Can we overcome societal problems with scientific and technological innovation?

We have a belief, almost a faith, that we can always overcome problems through innovation, particularly through technological innovation. This is something deeply seated in all of us. We all grew up thinking this. I believed this once too.

To illustrate America’s continuing blind faith in technological innovation, Tainter selects quotes from two eminent scientists, Vannevar Bush, an American engineer and, in effect, the first presidential science advisor, and Steven Chu, current U.S. Secretary of Energy and Nobel Prize winner in physics.

“Advances in science will . . . bring higher standards of living, will lead to the prevention or cure of diseases, will promote conservation of our limited national resources, and will ensure means of defense against aggression.” Vannevar Bush, from his report to President Truman outlining his proposal for post-war U.S. science and technology policy, Science, the Endless Frontier (1945).

“Scientific and technological discovery and innovation are the major engines of increasing productivity, and are indispensable to ensuring economic growth, job creation, and rising incomes for American families in the technologically-driven 21st century.” Steven Chu in his May 21, 2009 appearance before a Senate Appropriations committee.

Innovation as we know it today is a recent development

• In human history, looked at over the long term, there have been long periods of little or no technological change, sometimes lasting even hundreds of thousands of years.
• In contrast, today we have institutionalized innovation with short product cycles and continuous new introductions of updates and upgrades. We have a belief that innovation is the key to future prosperity.
• Today, our economic wellbeing depends on innovation. Firms that don’t innovate can’t compete. And nations that don’t innovate also cannot compete.
• In particular, our assumptions about innovation are central to our assumptions about what a sustainable future would look like.

Two views about sustainability in our future

The first is Jared Diamond’s concept: Diamond argues that “a modern societal collapse would be triggered ultimately by scarcity of environmental resources”

The second is the conventional economic perspective, representing the point of view of technological optimists: This perspective is based on the Principle of Infinite Sustainability which holds: (a) that resources are never scarce, just priced wrong; (b) as resources become scarce and rise in price, the market signals that there are rewards to innovation. And, ipso facto, new resources or technologies will rapidly emerge. It’s a matter of faith.

An alternative view

• The contrary view is that innovation grows in costliness and it exhausts easy solutions to problems. So the productivity of innovation is not constant;
• Research problems over time grow increasingly complex and difficult to solve. They grow more and more intractable, and in response innovation grows increasingly complex and it grows correspondingly more costly, requiring larger and large shares of the national wealth; and
• Innovation is subject to the same principles as scientific research is — costly and with ever-diminishing returns.

“Innovation reaches diminishing returns”

So said American philosopher, Nicholas Rescher, Chairman of the Center for the Philosophy of Science, University of Pittsburgh. Tainter bullets three relevant points from Rescher’s wide-ranging contribution to knowledge:

• “We need exponential increases in research expenditure to maintain a constant rate of innovation“;
• “Innovation reaches diminishing returns“; and
• “In natural science, we are involved in a technological arms race and with every ‘victory over nature’ the difficulty of achieving the breakthroughs which lie ahead is increased.“

Although Tainter does not cite the specific work from which Rescher’s quotes were taken, it may well have been his 1978 classic book, Scientific Progress: A Philosophical Essay on the Economics of Research in Natural Science. Pittsburgh: University of Pittsburgh Press. This book examines the future prospects for research in the natural sciences:

Rescher argues that if an exponentially increasing effort is required to maintain a relatively stable pace of scientific progress (as it has over the past century or so), then science is bound to enter a period of deceleration. Although the prospects of scientific progress remain literally limitless in principle, the facts indicate that the cost of scientific inquiry rises faster than the significant returns that it can yield, and hence a deceleration in scientific innovation will come about not only because of the ending of the frontier, but because of the increased difficulties of pushing it further out. The book concludes by providing an explanation of the reasons for the cost-escalation of scientific work.

Two contending possibilities: Conventional economic perspective or Rescher’s view of a “technological arms race”

• Conventional economic perspective: “By allocation of resources to R&D, we may deny the Malthusian hypothesis and prevent the conclusion of the doomsday models.”
• Rescher’s view: Once all of the findings at a given state of the art level of investigative technology have been realized, one must move to a more expensive level. . . . . In natural science we are involved in a technological arms race. With every victory over nature the difficulty of achieving the breakthroughs which lie ahead is increased.

For planning our future, it’s pretty important to understand which of these views is correct.

Science and innovation today

• The stock of scientific questions still waiting to be discovered is more specialized, more costly, and more difficult to resolve;
• As a result, research organization has to increase from individual scientists to teams of scientists, and technicians, and support staff who need specialized equipment, costly institutions, administrators, government rules, accountants, lawyers and so forth and so on; and
• The problem with research that grows costly and complex is that it produces fewer and fewer outputs per unit of investment.

Patent studies reveal declining productivity in innovation in both newer and older technical fields

Tainter points out that it’s common for older technical fields to become less productive in innovation: “We’ve always assumed that this was offset by higher productivity in innovation in newer technical sectors.” To investigate whether this is so, Tainter’s research team used a patent database to investigate a selection of both older and newer technical sectors, measuring patents per invention per year.

In older fields, the findings show a decline in productivity, as expected. But it is in the newer technical fields that the findings are truly surprising:

• In the older fields, with still active programs in innovation — such as surgical, medical, instruments, optics — the chart trend lines show declining productivity;
• Energy is one of “the more disturbing charts.” In each energy sector there is diminishing productivity to innovation. This is the case even in solar and wind technologies. The charts show the positive effects of the end of tax credits in the Regain administration, but the trend has continued downhill since then, suggesting that solar and wind innovations are already approaching technical maturity;
• Computer technology, information and communications technology also show patterns of diminishing returns to innovation; and
• And the newest technical sectors — biotechnology and nanotechnology — show exactly the same pattern. From their inception, these sectors are showing diminishing productivity in research.

Two studies worthy of special atention

Choosing from his wide-ranging body of evidence, here are just two examples that I have selected to highlight Tainter’s evidence of the declining productivity of innovation

1. Augustine’s Law

In case you skipped this quote at the top of the post, here it is again:

“In the year 2054, the entire [U.S.] defense budget will purchase just one aircraft. The aircraft will have to be shared by the Air Force and Navy 3½ days each per week except for leap year, when it will be available to the Marines for the extra day.” Norman Ralph Augustine

Law 16: showing the price of U.S. military aircraft over time

As a Wikipedia entry points out:

“Augustine’s Laws (1983) were a series of tongue in cheek aphorisms put forth by Norman Ralph Augustine, an American aerospace businessman who served as Under Secretary of the Army from 1975 to 1977. His most cited law is number 16, which shows that defense budgets grow linearly but the unit cost of a new military aircraft grows exponentially.” (See the above graph showing the price of U.S. military aircraft over time. By extrapolating from this factual data, Augustine arrived at his preposterous 2054 budget forecast. Or is it so preposterous?)

2. “Scientific doomsday is less than a century away” Derek John de Solla Price (1963)

In his use of this quote, Tainter points out that almost half a century has passed since it first appeared in de Solla Price’s most famous book, Little Science, Big Science (1963). de Solla Price was a physicist, historian of science, and information scientist, credited as the father of scientometrics. Here is the full quote:

“It is clear that we cannot go up another two orders of magnitude as we have climbed the last five. If we did, we should have two scientists for every man, woman, child, and dog in the population, and we should spend on them twice as much money as we had. Scientific doomsday is therefore less than a century distant.“

Tainter’s four conclusions about the future of innovation

In the context of the two preceding examples, plus the many other examples he reviews in the video of his conference address, Tainter concludes:

1. The productivity of innovation is declining and has been for some time (first noted in 1878);
2. We will need to allocate more and more resources — dollars and people — to research and development;
3. We can continue innovation only by taking resources from other major sections of the economy — for example, health care, defense, transportation, and infrastructure; and
4. He concurs with de Solla Price’s “scientific doomsday” scenario.

The future of innovation: Can’t we innovate our way out of problems?

Here is Tainter’s prognosis:

• Innovation will not disappear  overnight. We will continue to have innovation for some time. But innovation is going to continue to decline in productivity slowly over a period of decades. I don’t see any way to reverse this;
• By current trends, in another generation or so, innovation will have lost nearly 50% of its productivity;
• Industries and nations will begin to realize that it is no longer productive to invest in innovation;
• There is one hopeful sign: innovation is still profitable and is becoming increasingly profitable in emerging nations particularly in lower cost products that are suitable to those nations; much potential to innovate; costs are lower and companies can profit from simple innovations that are not profitable in developed nations;
• However, even in emerging nations, they will eventually go through the same process of increasing complexity, increasing costs and diminishing returns.

If technological innovation will not save the day, how will we solve the problem of sustainability? That’s the topic for Part 7.

Watch the 1 hour, 10 minute video of Dr Tainter’s 2010 Conference presentation here –