How to achieve sustainable monetary systems?
Excerpted from a longer and illustrated article by Paul Hartzog:
“In “Options for Managing a Systemic Bank Crisis”, Bernard Lietaer continues his interest in sustainable monetary systems. This time around he make a tie to complex systems and makes an important contrast between “efficiency” and “resilience”.
Lietaer and I have been on the same page at least as far back as Douglas Rushkoff and I started discussing “open source currency”
In this case, though, his language is a little weak, and so I’d like to recast it in complex systems terms here. First, “efficiency” is a useless term because it is always a ratio with an all-too-often unmentioned denominator, i.e. efficiency of what with respect to what? In other words, what are you saving? Time? Money? Hassle? Second, “resilience” suffers the same problem: resilience with respect to what? Systems that exhibit “robustness” or “highly optimized tolerance” are robust only to certain kinds of perturbations, and, by definition, not to others. For example some kinds of networks (ecologies, communications, etc.) are robust in the face of random failures, while others are robust in the face of targeted attacks. The topologies of these networks can, and do, differ greatly.
What I think Lietaer is trying to say is useful, however, and at its essence is this:
A finely tuned system exhibits efficiencies because 1) all of its parts are tightly coupled, and 2) it is tightly coupled with its environment.
By contrast, an adaptable, robust system is loosely coupled to itself and to its environment. While it is certainly the case that this adaptability carries a cost in terms of some efficiencies, it makes up for this by gaining other efficiencies. For example, when a cave fish evolves to work exceptionally well in that environment, it cannot function in other environments. Conversely, a chimpanzee can function in a wide variety of environments, but not as well in a dark cave as the cave fish. Adaptation is always potentially mal-adaptation. In addition, adaptation of any kind assumes that the environment remains remains relatively static and predictable. This leads us to an important maxim:
When the environment is static, the advantages tightly coupled adaptation outweigh the advantages of loosely coupled flexibility, but when the environment is variable and unpredictable, the advantages of loose coupling and flexibility outweigh the advantages of highly efficient tightly-coupled adaptations.
This is, of course, particularly true in the global economy.”
