Is Our Business/Economic System Like a Biological System?

Elisabet Sahtouris wrote an article in 2005 called The Biology of Business, which began with a dubious recapitulation of Darwin’s model and explanation of evolution, and then attempted to apply this model to business ‘ecosystems’.

Like many others who adhere to the myth of ‘progress’, she describes the first half of evolution of all-life-on-Earth as competitive and the second half (with us as the crown of creation) as cooperative. Stephen Jay Gould effectively demolished this romantic myth in his book Full House, and I won’t revisit that argument here, except to say that we are evidently not the crown on creation (merely one incidental and not particularly special node on an evolutionary tableau that has no ‘higher’ or ‘progressive’ levels), and that the ‘purpose’ of evolution is diversity, resilience (best served through complexity), and punctuated equilibrium — not knowledge, self-knowledge or ‘progress’. I know many people find Gould’s scientific explanation cold and deflating, but, not being of spiritual bent, I find it refreshing, humbling and completely intuitive.

At any rate, she goes on in her article to lament the dysfunction of our current economic system, which she blames largely on its inability to stick to the evolutionary principles of biological systems which were, presumably, its initial inspiration as a ‘social’ system. These principles are:

1. Self-creation (autopoiesis)
2. Complexity (diversity of parts)
3. Embeddedness in larger holons and dependence on them (holarchy)
4. Self-reflexivity (autognosis’Äîself-knowledge)
5. Self-regulation/maintenance (autonomics)
6. Response ability’Äîto internal and external stress or other change
7. Input/output exchange of matter/energy/information with other holons
8. Transformation of matter/energy/information
9. Empowerment/employment of all component parts
10. Communications among all parts
11. Coordination of parts and functions
12. Balance of Interests negotiated among parts, whole, and embedding holarchy
13. Reciprocity of parts in mutual contribution and assistance
14. Conservation of what works well
15. Creative change of what does not work well

For those not familiar with the jargon, holons are ‘layers’ of life, from cell to organ to body to community to Gaia, the community of all-life-on-Earth. These are, in effect, principles of collective self-management.

Elisabet goes on to lament that principles 9, 10, 12 and 13 in particular are currently not applied in much of our economic system, and describes a rather naive ‘eightfold path to excellence’ written by Tachi Kiuchi to correct these ‘flaws’ in the system.

The question is, is our economic system, currently or possibly, a collectively self-managing system? I think it is neither, for a simple reason: No species is capable of ‘creating’ collectively self-managing systems, or in fact any kind of complex system. By their nature complex systems are not fully knowable, and so they cannot be invented. They evolve by the collective cooperation and effort of all their constituent parts.

By contrast, economic systems consider most of their constituent parts as ‘resources’, externalities to be used for the benefit of a small and hierarchical group of preferred interests. They are dumbed-down, merely complicated systems, not complex systems at all. While they may aspire to imitate some of the principles of complex systems described above, they cannot possibly hope to embody any of them, any more than a robot can be designed to fully emulate the operating principles of a body, or a computer the operating principles of a brain. Constructed artifacts are merely that, and they are merely complicated. The principles by which they operate are limited by their construction, and vastly different from those of a complex system.

So what can we do to make our economic system more response-able, more like a true collectively self-managing, evolving system? The best we can do, I think, is to acknowledge its frailties, that stem from its fundamental complicatedness. Complex systems scale very well, and increasing complexity increases the resilience of these systems. Complicated systems, however, scale very poorly — they need hierarchy, brutal and rough intervention, and bureaucracy to function as they get larger. When it comes to complicated systems, small is beautiful. Complicated systems are only self-manageable when there are very few components. That is why human social constructs seem to work better when the number of people involved is close to six, or fifty (see chart above).

Rather than Tachi Kiuchi’s naive ‘eightfold path to excellence’ our business and economic systems would be better advised to break themselves down into very small, local, community-based units of human-manageable size, let their members operate them as the high-maintenance human constructs they are, and stop pretending that they are, or can ever be, what they are not.

I’m doubtful we can relearn the humility to do so, but I think there is no other workable way.