03 April 2010

Learning from Alderaan

'I felt a great disturbance in the mutuels, as if millions of horseplayers cried out in terror and were suddenly silenced.'

Clay Shirky discusses the collapse of complex business models in a recent post. The argument centers on the inability of complex structures to simplify their operations due to process and dogma.

Some excerpts:

When the value of complexity turns negative, a society plagued by an inability to react remains as complex as ever, right up to the moment where it becomes suddenly and dramatically simpler, which is to say right up to the moment of collapse. Collapse is simply the last remaining method of simplification.

In such systems, there is no way to make things a little bit simpler – the whole edifice becomes a huge, interlocking system not readily amenable to change...Furthermore, even when moderate adjustments could be made, they tend to be resisted, because any simplification discomfits elites.

When ecosystems change and inflexible institutions collapse, their members disperse, abandoning old beliefs, trying new things, making their living in different ways than they used to. It’s easy to see the ways in which collapse to simplicity wrecks the glories of old. But there is one compensating advantage for the people who escape the old system: when the ecosystem stops rewarding complexity, it is the people who figure out how to work simply in the present, rather than the people who mastered the complexities of the past, who get to say what happens in the future.

We may have passed the point of no return but ridding ourselves of the old ways might make this game better...thirty years from now.

1 comment:

Anonymous said...

Talking about good economic models,what are your feelings on the MLS this year? The Red Bulls are 2-0. I think they are sitting on a big season.

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