Systems Intelligence Part 3 : Deep Challenges

By Andy Thomson, enkel & Holonic

This is part 3 of a seven-part series about ‘systems intelligence’. The case for transcending typical systemic approaches to developing a regenerative economy. The other parts are here: 1, 2, 4, 5, 6, 7

In this instalment I use so-called Causal Layered Analysis (CLA), which was pioneered by futurist Sohail Inayatullah. This will help us understand the challenges today, why they exist and persist.

The nature of the interrelated systemic global challenges, such as climate change, resource depletion, and inequality are complex and generate numerous explanations and solutions as they do not fit one system archetype. The level of complexity in thinking about and addressing such complex challenges can be daunting and often leads to attempts to simplify problems and solutions.

Causal Layered Analysis (CLA) is a process that seeks to maintain much of the complexity and interdependence of multiple causes while providing some structure. It does so by presenting a series of simple questions. The following is a list adapted from the creator of CLA, Sohail Inayatullah as presented in his original model in 1998.

Here follows a detailed analysis of each of these six questions.

1. What global challenges do we see in the world today?

The global risk report that the World Economic Forum developed with global experts and decision-makers in 2018, provides a comprehensive overview of the most important challenges and potential risks currently facing humankind, as shown in figure 1. The report stresses the interconnective nature of these challenges, their complexity, and humanity’s lack of capacity and present inability to address them to be our biggest challenge. Paradoxically, it also mentions that “we are enjoying the highest standards of living in human history”.

These challenges manifest in interrelated symptoms of internal and external suffering, struggle, conflict, abuse, degeneration, anxiety, and disconnection with a stifling level of Volatility, Uncertainty, Complexity and Ambiguity (VUCA) across all six domains of the 3D Systems Intelligence Lens that I introduced in the second instalment of this blog series.

A more immediate way of seeing and understanding our present challenges is through British economist Kate Raworth’s Doughnut diagram. As shown in figure 2, the green doughnut denotes the “safe and just space” in which humanity needs to exist. The outer edge marks the ecological ceiling or carrying capacity of the Earth’s life-giving systems, whilst the inner being the social foundation above which everyone has their basic essentials and human rights assured.

The ecological ceiling comprises nine planetary boundaries, whereas the social foundation encompasses twelve social dimensions that have captured the social priorities from the United Nation’s Sustainable Development Goals — that are based on two years of global, multi-stakeholder consultation — whilst avoiding the contradictions that Jason Hickel at the London School of Economics outlines. Namely that the focus to achieving the goals involves much of the same economic reasoning that has caused the issues in the first place.

Figure 2 Kate Raworth’s Doughnut Model

As can be seen in red, we are currently exceeding four planetary boundaries and falling short across all the social indicators. Table 1 and 2 show specific detail of how humanity is tracking.

Table 1 Social indicators (Source: Raworth 2017)
Table 2 Planetary boundaries (Source: Raworth 2017)

2. What behaviours, patterns and trends have there been over time that have influenced these challenges?

Although the origins of these challenges date back further, the post-war period has been enormously influential. First, under “Keynesian economic” capitalist policies we saw a huge spike in linear “productive” economic activity leading to increased wellbeing for many parts of the developed world up until the late 1970s. However, by the 1980s, dwindling growth in these countries and a changing world saw the rise of free-market neoliberalism.

During this period, and hugely amplified under neoliberalism, we have seen competitive, extractive and linear ME-MY and US-OUR focused practices and behaviours(see definitions of these concepts in my earlier blog post here) intensify in parallel to exponential technological development. Ones perceived to be myopic, greedy, wasteful, sometimes unethical and materialistic, which are self-serving of the individual or the group — ego-sociocentric — with diminishing regard and connection with the WE and IT domains, even though our understanding of them has increased. [1] [2] [3]

These are interlinked with interdependent trends and patterns that include rising inequality, globalised hyper-competition, technological development, financial deregulation, the financial economy now dwarfing the productive economy, rising private and sovereign debt, monetary and financial crisis and the negative trending of many of the factors shown above.

Combined with slowing and unpredictable growth, our extractive, linear economic system is trending within a pronounced period of maturity and imminent decline with regards to wellbeing, as shown in figure 3. A growing VUCA period where the warning signs are becoming more frequent, intensive, and sustained.

Figure 3 Moving towards socioeconomic decline.

This seems to coincide with the general assessment and predictions of the seminal but heavily criticised “Limits to Growth” simulation and publication from 1972, which in a 2018 update was found to have tracked reasonably accurately.

Figure 4 The Limits to Growth original projections.

3. What causes and systems structures influence these behaviours, patterns, trends, and why?

While this is an extremely complex and evolved question, the following overview is offered as a means of a simplified visual explanation that builds on the work of The Worldwatch Institute and on conversations I have had with open money advocate and developer Michael Linton over the years. It shows the import flow networks (money, resources, labour, products and services, and natural ecosystems), structures, barriers, drivers, forces and pressures at play within a typical community as part of a global extractive, linear economic system and how these drive the occurrences described in the previous questions. My primary focus here is on the three external domains.

Shown in figure 5, a graphical stock and flow diagram, are three levels:

  1. The living world at the bottom (ecosystems and society over time).
  2. The local real/productive economy (value adding and exchange) in the middle . Note that the bottom layer is the sink and source for all the activity on this layer.
  3. The financial economy (money, credit, finance, taxes, and subsidies) at the top.
Figure 5 Value extraction in local economies (Source: Developed from Jackson and Victor).

From the bottom to middle layers are upward flows, through their relevant markets and legacy infrastructures/systems, of material inputs, energy, and labour (objective value); and downward flows of local need/want provision as well as negative externalities/impacts. Within the middle circular layer, we see the circulation of money, between businesses and individuals as part of the local productive economy.

Between the middle and the top layers are the downward flows of money (debt created by commercial banks when individuals or businesses take out a loan or through investment) and upward flows of money in the form of principal and interest repayments on loans (the principle being destroyed), rents, dividends, substantial savings and investment in non-productive speculative assets (property, etc), as described in a 2014 Bank of England report on how most money is created today.

Here we also see the central regulatory role governments and central banks try to play through fiscal and monetary policy, affecting taxes, subsidies, spending, legal tender control, and banking interest rates.

The top layer is shown as a flow aimed to represent the global financial system and its relevant markets, with no real physical or moral ties to the others.

Across the middle layer are the flows of physical exports and imports and their relating reverse demand chains through local or international markets. Across the bottom, the negative externalities/impact flows between neighbours (regional, national, and global). Magnets show the direction of value extractive forces on this community and its surrounding ecosystems. To a greater or lesser extent, this community, and those within it, try to exert those same forces, sometimes exploiting system loopholes, on other localities and individuals at varying scales whilst utilising a whole host of scarcity inducing systems and structures that defend and protect themselves from these insatiable forces.

These forces are amplified by the larger extractive upwards flows that the growing financial economy exerts and have augmented through neoliberal deregulation and technological development, which have essentially allowed more prominent globalisation, resulting in many of the trends and behaviours discussed above.

At a global level, what we ultimately have is an antiquated, growth dependent, infinitely complex, hyper-competitive yet inflexible ego-sociocentric tug of war system, where the rope appears to be ultimately rooted in the bottom layer. At a monetary level, the fundamental national accounting identity rule simply shows that every asset has a corresponding financial liability somewhere in this global system and the total of these is zero.

So, the development of one region — or an individual’s wealth — is really at the future cost of others and the planet somewhere within the system.

This extends beyond the richest 1%, or really the 0.001%, to anyone who is making money through myopic speculation or that extracts more wealth than they create. Unfortunately, these extractive powers mean that we have ego-sociocentric system lock-in as explored below.

4. What mental models, values, beliefs and assumptions influence these causes, systems, and why?

The western model of progress has been largely based on a mechanistic deterministic view of the world, or mindset based on unquestioned or dated assumptions. This framing of the world has influenced everything from the hard to soft sciences, including how we treat and understand economic thought and behaviour.

As such, capitalism growth and mainstream economics have evolved into rigid, inflexible fundamental dogmas, cemented by the almost widespread failure of communism as the believed only socioeconomic alternative. Short-term efficiency and success have taken precedence over long-term effectiveness, with the desire more often being self-consuming.

Success, happiness, and wellbeing in effect have been heavily externalised and commodified. Measured in terms of GDP on the national sociocentric level, and in the form of financial wealth, possessions and status — things that are inherently scarce because of the system dynamics at play — at the egocentric level.

However, these mental models and values appear to be reinforced and engrained throughout our learning and many aspects of our everyday lives, making them hard to escape. These include our analytical “production line” type education systems, competitive careers, propaganda-filled news/entertainment, through to our misunderstood yet constant psychological relationship with money and it’s coercive, dividing nature that serves as an indicator and amplifier of our desires, vices, and fears.

Through feedback with the rigid OUR domain, this competitive, materialistic, and money-driven mindset creates internal psychological mental boundaries and barriers, causing conflict and separations within and between people .

In summarising, the internal lens of our 3D Systems Intelligence Lens, that informs economic “ethics” and purpose, is distorted and damaged as shown in figure 6.

The ME taking precedence, the US being somewhat damaged — especially at larger scales — and the WE relatively non-existent. Mainstream economic thought is still primarily focused on the external OUR “engineering” aspects of the economy — with lacking but improving regard for the IT — and their interaction with the individual ME and MY domains. With “rational economic man” seen to be the essential driving force behind efficient and effective markets.

As such, according to the dictionaries, our definitions and understandings of what an economy is, revolve around external factors of production, trade, money, consumption of goods and services, and wealth of countries, to which the mainstream feel a disconnection.

Figure 6 The broken 3D economic glasses.

Many of the issues discussed here can be seen in table 3 that looks to summarise and compare different schools of economics based on the work of South Korean institutional economist Ha-Joon Chang.

Table 3. Comparing different schools of economics. (Source: Durden and Hedge 2014).

5. What unconscious myths, metaphors, images and narratives influence these values, beliefs and assumptions?

Having applied Causal Layered Analysis with two different, yet predominately western groups, two categories of myths and metaphors or a mixture of the two generally surface. The first relates to medieval or primitive times, where a sense of anxiety to threats and the unknown are prevalent. Within these narratives, there is a sense of protection, defence, separation, boundaries, competition, conquering, failure, darkness, hierarchy, and positions of power and safety. Examples include “king of my castle”, dominance, rigidity, “money is king”, “a dog-eat-dog world”, and feudalism, as shown in figure 7.

Figure 7 Medieval and hierarchical myths and metaphors.

The second relates to confined mechanical analogies and others which show a lack of purpose, monotony or even absurdity — illustrations of the separation between mind and matter. Examples include the production line, cogs in a machine, a “road to nowhere”, “stuck in a fishbowl” and “lemmings heading off a cliff”, as shown in figure 8.

Figure 8 Myths and metaphors showing a lack of purpose.

When exploring the reasoning behind these myths and metaphors and how they reinforce the stories we tell ourselves and maintain with others, the first group discussed the goal of ascending, winning, US/OUR against THEM/THEIR, ME/MY against YOU/YOURS.

The second group talked of conformity, short-term perspectives, the “here and now”, and because the “system is the way it is“ trying to change it is futile. As such there appears to be no real myth or metaphor that works at the WE level in many western cultures from an economic perspective. However, through conversation with other cultures that do have, it seems they have seen these eroded by ones similar to those discussed here.

6. How do these layers interrelate and interconnect?

All of the aspects discussed above are part of an interconnected evolutionary process of nonlinear causality, even though the Causal Layered Analysis might seem to promote some sort of linear causality. Interacting with these layers are the unconscious pre-existing ‘frames’ that we use to understand how things work and our relationship to them. These including our use of psychological symbols — such as money and language, which are somewhat mechanistic, belligerent — , survival instincts, sense of self and others, a fear and denial of death, and a separation between mind and matter.

Although individuals and groups have their own specific worldviews, these factors are said to make up the Weltanschauung (German expression meaning “wide world perception” that develops over centuries and millennia) of many western cultures, which through colonisation, the industrial revolution, globalisation and, ultimately, centuries of western dominance, have spread further afield.

Demonstrating strong medieval and feudalistic influences, the foundations of this now dominant global “wide world perception” seems to be centred around the relationship between scarcity and existential fear — which are typified by the prominence of the external MY and OUR domains — , and the resultant structures of power and conformity that this has given rise to.

Scarcity having its roots in the ensuing problem of basic need provisions seen throughout many stages of human evolution, due to issues such as a lack of natural resources, knowledge, energy, and technology. Whilst fear being associated with survival and death, manifesting in multiple forms — including the fear that scarcity brings — that breeds further forms of fear and intensifies the sense of self.

During different periods, scarcity and fear have been exploited in different ways, leading to levels of conformity and/or ignorance — often following periods of conflict and/or rebellion — , thus, increasing the power and wealth of individuals, families, nations, and empires.

Throughout history, as language, mental models and social and technological innovations have evolved into more complex systems and structures, scarcity and existential fear appear to have continued to be firmly embedded in their DNA, whether by intention, evolution, or a mixture of the two.

As today, even in times of potential relative abundance and possibilities, we still subscribe to myths and what is effectively artificial scarcity lock-in and value extraction from the Earth and those at the bottom towards the top. Perpetuated by the short-term, evolving forms of fear that these systems create, which include the unknown, complexity, change, social exclusion and failure.

So to summarise each question as part of a complex web of intertwined causality, there appears to be:

  1. A dominant and growing level of VUCA in the world, manifesting in interdependent challenges that no one wants and that we are ill-equipped to deal with.
  2. A pattern of highly competitive, linear, extractive, ego-sociocentric behaviours.
  3. A dominance of inflexible, centralised, growth-dependant scarcity inducing systems and legacy structures.
  4. A predominance of deterministic mental models and ego-sociocentric beliefs and values.
  5. A tendency towards unconscious mechanistic and feudalistic myths, metaphors, and narratives.
  6. An overarching “wide world perception” that embodies fear and scarcity (survival) that separates the internal (mind) and external domains (matter).

With all living systems arguably demonstrating a certain level of VUCA characteristics, its believed that humanities “system ignorance” as described here, has led to an overbearing and growing level of VUCA that we appear to lack the “3D systems intelligence” to properly address, although various solutions have been proposed.

In the following blog post I will look at some alternative models.

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