Single Sell System

Saturday, November 12, 2011

In the pursuit of improvement it must be remembered that the system must remain viable: better but dead is not the intended outcome.  Viability of socioeconomic systems implies that money is flowing to where it is needed, when it is needed and in the amounts that are needed.

Money is like energy – it only does worthwhile work when it is moving: so the design of more effective money-streams is a critical part of socioeconomic system improvement.

But this is not easy or obvious because the devil is in the detail and complexity grows quicklyand obscures the picture. This lack of clear picture creates the temptation to clean, analyse, simplify and conceptualise and very often leads to analysis-paralysis and then over-simplification.

There is a useful metaphor for this challenge.

Biological systems use energy rather than money and the process of improvement has a different name – it is called evolution. Each of us is an evolution experiment. The viability requirement is the same though – the success of the experiment is measured by our viability. Do our genes and memes survive after we have gone?

It is only in recent times that the mechanism of this biological system has become better understood. It was not until the 19th Century that we realised that complex organisms were made of reproducing cells; and later that there were rules that governed how inherited characteristics passed from generation to generation; and that the vehicle of transmission was a chemical code molecule called DNA that is present in every copy of every cell capable of reproduction.

We learned that our chemical blueprint is stored in the nucleus of every cell (the dark spots in the picture of cells) and this led to the concept that the nucleus worked like a “brain” that issues chemical orders to the cell in the form of a very similar molecule called RNA.  This cellular command-and-control model is unfortunately more a projection of the rhetoric of society than the reality of the situation. The nucleus is not a “brain” – it is a gonad. The “brain” of a cell is the surface membrane – the sensitive interface between outside and inside; where the “sensor” molecules in the outer cell membrane connect to “effector” molecules on the inside.  Cells think with their skin – and their behaviour is guided by their  internal content and external context. Nature and nurture working as a system.

Cells have evolved to collaborate. Rogue cells that become “mentally” unstable and that break away, start to divide, and spread in an uncollaborative and selfish fashion threaten the viability of the whole: they are called malignant. The threat of malignant behaviour to long term viability is so great that we have evolved sophisticated mechanisms to detect and correct malignant behaviour. The fact that cancer is still a problem is because our malignancy defense mechanisms are not 100% effective. 

This realisation of the importance of the cell has led to a focus of medical research on understand how individual cells “sense”, “think”, “act” and “communicate” and has led to great leaps in our understanding of how multi-celled systems called animals and plants work; how they can go awry; and what can be done to prevent and correct these cellular niggles.  We are even learning how to “fix” bits of the the chemical blueprint to correct our chemical software glitches. We are no where near being able to design a cell from scratch though. We simply do not understand enough about how it works.

In comparison, the “single-sell” in an economic system could be considered to be a step in a process – the point where the stream and the silo meet – where expenses are converted to revenue for example.  I will wantonly bend the rules of grammar and use the word “sell” to distinguish it visually from “cell”. So before trying to understand the complex emergent behaviour of a multi-selled economic system we first need to understand better one sell works. How does work flow and time flow and money flow combined at the single sell?

When we do so we learn that the “economic mechanism” of a single sell can be described completely because it is a manfestation of the Laws of Physics – just as the mechanism of the weather can be describe using a small number of equations that combine to describe the flow, pressure, density, temperature etc of the atmospheric gases.  Our simplest single-selled economic system is described by a set of equations – there are about twenty of them in fact.

So, trying to work out in our heads how even a single sell in an economic system will behave amounts to mentally managing twenty simultanous equations – which is a bit of a problem because we’re not very good at that mental maths trick. The best we can do is to learn the patterns in the interdependent behaviour of the outputs of the equations; to recognise what they imply; and then how to use that understanding to craft wiser decisions.

No wonder the design of a viable socioeconomic multi-selled system seems to be eluding even the brightest economic minds at the moment!  It is a complicated system which exhibits complex behaviour.  Is there a better approach?  Our vastly more complex biological counterparts called “organisms” seem to have discovered one. So what can we learn from them?

One lesson might be that is is a good design to detect and correct malignant behaviour early; the unilateral, selfish, uncollaborative behaviour that multiplies, spreads, and becomes painful, incurable then lethal.

First we need to raise awareness and recognition of it … only then can we challenge and contain its toxic legacy.