Complexity? Comlexity!

What is complexity all about, and why exactly is it that it might help us to get a little bit closer to understanding why the observed hot and cold flushes come about? Some think of Complexity Science to be the science of all sciences. I want to explain why I share this view by briefly introducing Complexity and the phenomenon  of emergence and hinting at some of the most fascinating aspects of this relatively young discipline. 

Complexity science is concerned with the study of phenomena which emerge in a system that consists of a collection of interacting objects.  Mostly, these phenomena are not explainable by simply looking at the behaviour of individual objects. What makes complexity so exciting is that we can observe complex, higher order structures emerging from the interaction of objects that are equipped with fairly simple decision rules. Some of the most popular examples of complex systems include the financial markets, our immune system, ecological systems or even the world of quantum physics. In fact, the range of systems that could potentially be subject to study appears endless.   

The following  set of necessary properties that a complex system should exhibit is proposed by Neil Johnson (Neil Johnson, Simply Complexity). This will be useful for the purposes of this project when trying to identify how both the economy and the introduced reference models fit these criteria.

1. The system contains a collection of many interacting objects, whose behavior is affected by memory or „feedback“ (the objects include some capacity for adaption and learning)
2. The system is open, meaning that the system can be influenced by its environment
3. The system evolves in a highly non-trivial way and is generally far from equilibrium, meaning that in principle anything could happen and provided that we observe the system long enough, it probably will
4. The emergent phenomena are not brought about by some central controller.
5. The system exhibits a mix of ordered and disordered behaviour.

Looking at this set, it seems fairly intuitive to restrict study to systems “where we have useful descriptions in terms of rules and laws” (Holland, Emergence), at least for the purposes of this project.

The goal of complexity science is to model, describe and possibly predict the behavior of such systems.  Here it  might  be interesting to note that we might not need to fully understand the constituent objects of a system in order to describe how the aggregate behaves, as simple bits interacting in a simple way might lead to a rich variety of higher order structures and outcomes. This is why complexity science might be so relevant. A lot of academic research has been focused on understanding every aspect of a particular problem. But it seems likely that no level of understanding of individual objects will help us to explain certain phenomena (for example understanding individual brain cells might not help to explain the occurrence of Alzheimer).  


What I find particularly exciting is that a lot of the research suggests that partially understanding one system from say Physics might actually help us to increase our understanding of another system from a totally unrelated discipline, say economics. It is this inter-disciplinarity that this project will also make use of. All the work that is done at the Santa Fe Institute is a prime example of the possible relevance of this approach. 

The next step will to be to look at the aggregate economy from a Complexity point of view. I will apply the above set of criteria in order to justify the claim that the economy can be seen as a complex system. I am then hoping to be able to justify that both road traffic and  the behavior of  ants are complex systems  that can be seen to exhibit parallel or contrasting behavior to the observed hot and cold flushes in business cycles. The challenge will be to show that both models can be seen as reference models for the economy. This will involve a formulation of the possible dangers and limitations of such an approximation. Building on that, I will look at the occurrence of inefficient phenomena in both reference systems and hopefully will be able to draw some conclusions about the subject of interest.

(If complexity science is a fairly new subject  to you, then looking at Mitchel Resnick's active essay "Exploring Emergence" (a link is provided at the sidebar) might be an entertaining and nice way to familiarize yourself with the subject matter. Also check out the homepage of the Santa Fe institute, if you are interested in the whole range of possible applications of the study of emergence)