Chapter 6: The Growing Volatility of the Global Economy from a Complex System Perspective
Chuan-Leong Lam INTRODUCTION In this chapter, I would like to oﬀer some observations on the properties of complex systems and use these properties to: 1) argue why simple causeand-eﬀect reasoning cannot adequately handle complex systems; 2) explain why the volatility of the global economy has increased; 3) point out some implications on the process of innovation; and 4) make some conjectures on the limits of the cognitive process and ask whether information technology (IT) can help humans extend their cognitive skills at sense making. NEWTONIAN–CARTESIAN LOGIC Over the last 300 years, Newtonian physics and Cartesian logic have been immensely successful in using a cause-and-eﬀect type of reasoning to explain phenomena in the physical world. From the motions of the planetary system to the clever machines around us, the ‘laws of physics’ prevail marvellously.1 This has led to an unquestioned assumption that reason holds the key to any phenomenon and its subsequent mastery. In our daily actions, we use this cause-and-eﬀect reasoning implicitly without question. To paraphrase the economist J.M. Keynes ( 1964)2 we are slaves to the Newtonian–Cartesian logic system.3 However, cause-and-eﬀect reasoning is best applied to simpler systems, for example rigid bodies or homogeneous gas or liquid systems. I believe that looking at issues in management or government through the framework of complex systems is more helpful in making better decisions. 117 118 The digital business ecosystem COMPLEX SOCIAL SYSTEMS Social systems are typically complex and have these following characteristics: 1....
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.