Tuesday, February 9, 2010

Order is for the Birds

It is tempting to think of the global economy as an incredibly complex system that over the years has been designed and built from the top down by the world’s best and brightest politicians, businessmen, scientists and economists. Actually, the global economy was built almost completely from the ground up, not by an elite few, but by the actions of the many individuals involved.

The concept of complex systems, such as the modern globalized economy, arising from the interactions of a few simple rules played out in large numbers over time is called emergence. Hayek uses the Greek word Kosmos. Kosmos, or emerging complexity as it is also known, sounds very complicated, but it is actually quite simple. Take for example the flocking behavior of starlings. Groups of thousands and thousands of birds flock together in dense, fast moving groups. They wheel and dive through the sky in an amazing avian dance. Each bird is flying fast and very close to its neighbors. Any wrong move would be hazardous for an individual starling if it were to collide with another bird or get separated from the flock.

Biologist Richard Dawkins describes this phenomenon as beautiful, balletic, and almost miraculous. Dawkins goes on to say that “despite all appearances, there is no choreographer, and as far as we know, no leader. Each individual bird is just following local rules.” (The Greatest Show On Earth p 218). These flocks are a result of this emerging complexity. Each bird is following a set of simple rules such as: don’t fly too close to your neighbor, try and keep the same speed as your neighbor, and turn when your neighbors turn. Dawkins again makes the point that this complex structure arises through the interaction of simple rules on a large scale: “The key point is that there is no choreographer and no leader. Order, organization, structure – these all emerge as by-products of rules which are obeyed locally and many times over, not globally… It is all done by local rules… No choreographer. No conductor of the orchestra. No central planning. No architect” (220). A vast and complex system such as the global economy came into being as a result of millions and millions of individuals acting on basic rules. Things go well or poorly as a result of the emerging complexity of this system.

Those who cannot possibly live in a world without top down design might argue that the birds were designed to fly in such complex flocks. If that's true it's possible that humans were designed to have such poor economic systems.

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