Since the Enlightenment, human civilization has increasingly lived with the presumption that, via reason and knowledge, we would have the power to manage.
It is the so-called "General Motors" view of scientific management that took hold from the 1950s onwards. We argue that it is a profoundly inadequate model for how businesses, societies and civilizations evolve.
If one looks at the United Nations and other post-World War II, Bretton-Woods institutions such as World Bank and International Monetary Fund (IMF), there seems to have been, since their inception, the same mid-20th Century faith that such management might even lead to some form of a centralized world governance structure that would "know" and "allocate" and "manage."This view of global governance and this arrangement of international organizations is misguided, even dangerous. It can't adequately cope with many issues, including global climate change, food insecurity, loss of biodiversity and other similar global policy problems.
Policy makers — both global and local — need to question one of the central assumptions found in top-down scientific management models. This assumption states that a global or "regional" social welfare function could be used as a proxy to design institutions and their organizational functions. We argue that no one can pre-state what new "salients" of economic or cultural activities will arise, from what little or large triggers. Critically, not only do we not know what will happen, we do not even know what can happen.Optimization and control relying solely on the variables known right now is often a dangerous illusion. We cannot optimize over a state space of a pre-defined social welfare function. We do not know the new relevant variables that will arise.
Instead, an evolving and adaptive complex-systems approach to global governance, with one's focus on wise enablement, not control, might provide an alternative way to design the functions and capacities of international organizations.Under this view, we are called upon to be open to the partially unknowable adjacent possible, not to control, but to enable and adapt, and partially shape what will emerge. This is the profound opposite of the General Motors model, from dictatorship and from a controlling global governance managed by the elites who "know."Under this complex-systems perspective, we begin to see democracy in a new light, a framework of freedoms and procedures that allows and enables adaptability, shaping the possibilities of where we will go.If we assess the three global crises currently known as global climate change, global food insecurity and global biodiversity loss, we find that centralized decision makers at international organizations such as the World Bank, IMF and World Trade Organization (WTO) have valued maximization of economic growth as a primary decision element.
That emphasis has led to unintended environmental and social effects, including global climate change, global biodiversity loss, ecosystem degradation and increasing food insecurity.Emphasis on maximizing economic efficiency for global production of goods and services has led to strongly centralized "free trade policies" that are enforced by international organizations such as WTO. The environmental impacts of such free trade policies have not been internalized through imposition of Pigovian taxes in the conduct of international trade.
The powerful industrial north and allied transnational corporations have been able to negotiate terms of trade that maximize their profits and retain current socio-political power patterns, while greenhouse gas (GHG) emissions resulting from the global industrial complex, mining, deforestation, wasteful consumption and energy burning continue to accumulate in coupled atmospheric and oceanic systems. Global climate change science is unable to predict an accurate timing of critical phase transition; however all global circulation models agree that our business-as-usual path of GHG emission trajectory will sooner or later cause a phase transition in the coupled atmospheric system; after which socio-political policy actions and behavioral changes by themselves will not be adequate to stop run-away climate change because natural bio-geo-chemical cycle would have degenerated to the point that reduction in anthropogenic GHG emissions would be inadequate to stop global warming effect from playing havoc in the global socio-ecological systems.
Protection of free trade through centralized global institutions and maximization of economic growth will only exacerbate GHG emissions. On the other hand, international climate policy experts are well aware of the fact that any strong action by a handful of nation-states would shift global industrial production to the nation-states that do not take any meaningful action on regulating GHG emissions.The governance of global climate, food and biodiversity crises pose a fundamental normative or value ambiguity challenge, i.e., experts in centralized international organizations do not and can not know the space of variables and strategies over which the optimization-decision problem is to be stated. Both the mitigation of and adaptation to global climate change requires deep, long-term foresight, and unwavering collective/normative human action at the global scale.
Yet, the complexity of managing global-climatic change, and its impacts on irreversibly changing the evolutionary pathways of biological, technological and economic systems, remains a deep puzzle, beyond the reach of positive sciences.From a normative standpoint, which is an essential component of any governance effort to deal with the complexity of complex systems, international organizations need to move beyond the positivistic goals of managing and controlling global socio-ecological systems. Management and international organization sciences need to move beyond "optimization-envy."There is a need to accommodate both facts (understanding) and values (normative prescriptions) for managing global environmental and social crises. Furthermore, management and international organization sciences will need to let go of reductionism and replace it with the acknowledgment of normative (or value-laden) complexity of managing complexity.
Perhaps most importantly, we need to explore, not control, "enablement" and adaptability to manage huge systems which engender ever new relevant features that alter the wisdom of earlier management plans. Again, we not only do not know what will happen, we do not know what can happen, hence we must change our organizations to reflect this reality of the real world as it evolves. Enablement and adaptability may well require a mixture of interacting local and regional structures that explore, cooperate and compete for wise policy decision.
This is the opposite of global, top-down control pretending that it knows. Further, given the complexity of dealing with global climate change, global food insecurity and global biodiversity loss, the rationalist and normative arguments based upon the logic of Pareto optimality and Nash equilibria lead to poorly defined international institutions that create perverse incentives for local and indigenous communities, displace biodiversity through the removal of old growth forests, engender inequities due to century old property right and tenure conflicts, assume technological methodologies that cannot objectively assign baselines and, above all, place a monetary value on natural and biological systems that trivializes the worth of biodiversity and social-ecological systems through assumption-laden, institutional-design frameworks and game theory.Due to the many invalid assumptions, and a lack of reality-checks, the Pareto optimal fitness landscapes could not be pre-defined by rational and/or centralized planners. This in turn implies that global social welfare functions could not be pre-defined by rational planners.
We emphasize this un-prestatibility by arguing that the expected utility functions and strategy spaces of different stakeholder groups are not fixed; rather they are context dependent and change in unknowable ways. The expected utility functions and strategy spaces of different stakeholders change with changes in technology, boundary conditions, biological evolution and other endogenous and exogenous drivers of change in the social-ecological systems that are typically ignored when modeled by Pareto-optimizing rational planners.Global governance mechanisms and policy designs need to incorporate a complex-systems perspective in designing and supporting international policy and institutional mechanisms.
Under a complex-systems perspective, social-ecologoical systems could transition in and out of multiple stable states, or even exist far from equilibrium. Instead of arguing over the design of inter-temporal global welfare functions, or assuming that economic growth is the dominant criteria in setting up utility functions for macroeconomic policy making, a complex-systems perspective opens up the possibility of an adaptive, decentralized and democratically anchored global governance.
Text by Asim Zia and Stuart Kauffman
Source:www.npr.org, Sept.6, 2011