Rikard Lundgren (Steendier s.à.r.l.): How we make sense of an increasingly complex world
Up until the industrial revolution, the majority of us were busy with staying safe and gaining our daily bread. As economies and prosperity grew, we have become richer, safer, urbanized and more connected than ever before. Through internet and IT, we are now constantly aware of bigger and more complex questions and issues than we ever had to think about in the past.
The Fog of war
Climate Change, China’s challenge of the US for global supremacy, EU and Brexit, gender emancipation, terrorism, religious fundamentalism, immigration, world poverty. The list gets longer by the day. We feel compelled to form an opinion about many of these complex issues. But how equipped are we to handle the complexity of such big questions? Are we really capable of absorbing enough data to form a well-founded opinion? Can we distinguish between real facts and fake news? Maybe facts that seem credible are planted on our FaceBook account to sway our political views? When observing debates in various media or when discussing with friends or colleagues, it becomes clear that to grasp very complex issues, we often use various simplification strategies. Some may be appropriate whereas other may just be a convenient way to avoid having to dig deeper.
“Popular explanations are the enemy of true understanding”
Simple Rule of Thumb
“The truth about climate change probably lies somewhere in the middle between the deniers and the eco-nuts” or “Immigration/globalization/China is the cause of all our problems.” To use a simple one-sentence rule to understand and decide what to believe about complex issues, is a serious oversimplification. Its’ correctness is at best like that of a clock that stands still and tells the time correctly twice every day. However, the person believing that is how the world works doesn’t have to dig deeper into the facts. Beyond that convenience factor, this simplification is pretty useless.
“Democracy, peace, human rights and free market capitalism are fundamental values.” These norms may be embraced by many. But their value as tools for understanding complex issues is very very limited. In natural sciences, we no longer accept dogma as a method for finding the truth. But we gladly accept such statements as gospel when we approach social, economic and political issues. The benefit of a moral compass when finding our position on a complex societal issue, is that it makes us feel noble and may help us win arguments. Who after all wants to be seen as an anti-democratic communist war-monger if that is what comes with having a different opinion on a complex matter. Being called Hitler in a web discussion is only a few clicks away!
Expertise vs fame
We traditionally think of an academic expert who has studied a topic for decades as an authority. Now the internet and social media have created a new type; authority-by-likes or fame. So called influencers. A teenage girl with learning difficulties can become an internationally recognized authority on climate change. A TV comedian playing a politician can be elected as president of a 44-million real country. A famous footballer can lead his followers to believe that the way to reform the banking system is to take out all our money. It takes great courage to publicly disagree with Greta even if the purpose is to bring nuance to a highly complex and technical discussion. The new authority-by-popularity is deeply disturbing and can lead to serious complex issues being treated superficially or wrongly.
Lies, damn lies and statistics
While there are many good reasons for using statistical models as a method for untangling complex issues, overuse of models lead to an unfounded belief that there is precision and predictability where there is none to be had. (“Based on BoE models a positive Brexit vote will reduce home prices by 1/3 and reduce GDP by 8%”). Relatively simple, natural laws based, linear models, founded on fixed assumptions are unfortunately used to predict the behavior of complex adaptive systems. To believe that a macroeconomic model can produce precise forecasts of the future behavior of a learning socio-political economic system governed by decisions about issues not yet known, by politicians not yet elected, is clearly nonsense. Another example of over-confidence in a model was the prediction made by the IMF of the development of Sweden’s debt to GDP ratio just after the banking and SEK crisis of 91/92.
“Debt to GDP ratio will reach 153% within 5 years”. The actual number after 5 years was a 53%!, because of radical political decisions and a record change in household saving ratio. To present precise numbers as predictions, knowing that the model used is highly sensitive to adaptive changes in a complex system, is disingenuous.There are many “false friends” offering easy, simple ways to understand the complex issues we get bombarded with. Unfortunately, no real understanding is to be gained from comfortable simplifications. We should be deeply skeptical towards those who suggest simple, emotional, moral or too precise explanations of complex issues. They are likely to have other motives than our enlightenment and understanding. Beware of consensus! It is a dangerous thing! It is not by popularity contest that we can reach any deeper understanding. Complex issues and systems are indeed complex, and that means they are not static but move. This is the uncomfortable temporal instability of truths about complex issues we need to accept and live with.