Over-simplified models, complex social systems

The 2021 Nobel Prize for Physics has been shared by three physicists (with one half jointly to Syukuro Manabe and Klaus Hasselmann) “for the physical modelling of Earth’s climate, quantifying variability and reliably predicting global warming” and (and the other half to Giorgio Parisi) “for the discovery of the interplay of disorder and fluctuations in physical systems from atomic to planetary scales”, according to the citation by the Nobel selection committee.

Nod for modelling methods

The 2021 Nobel Prize in Economics (or the The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2021) was awarded to David Card, for proving that rises in minimum wages increase employment levels (and improve overall societal well-being), contrary to the views of most mainstream economists that because higher wages increase firms’ costs, the well-being of firms (and societies) will be harmed. The other half of the Economics Nobel went to Joshua D. Angrist and Guido W. Imbens for improving economists’ tools for understanding complex systems, which were tools David Card had also used. Thus, the Physics and Economics Nobel prizes were for contributions to methods of modelling complex systems (apart from the half in economics for insights into wages and labour markets using new methods in economics).

Also read: Nobel Prizes 2021

A quarter century ago, Nobel laureates in economics, Kenneth J. Arrow and Brian Arthur, had arranged a meeting, at the Santa Fe Institute, of economists with physicists including Nobel Laureates, Murray Gell-Mann and Philip Anderson, to understand what economists can learn from physicists about the formulation of theories and models. The economists presented their models.

M. Mitchell Waldrop gives an account of the meeting in his book, Complexity: The Emerging Science at the Edge of Order and Chaos.

“And indeed, as the axioms and theorems and proofs marched across the overhead projector screen, the physicists could only be awe-struck at their counterparts’ mathematical prowess — awestruck and appalled. It seemed as if though they were dazzling themselves with fancy mathematics, until they couldn’t see the forest for the trees. They weren’t looking at what the models were for, and whether the underlying assumptions were any good. In a lot of cases, what was required was just common sense.”

Realised a long while ago

Physicists had realised the limitations of human minds to understand how the world really works a century ago. The Nobel Prizes in Physics were awarded to Max Planck (1918), Albert Einstein (1921), Niels Bohr (1922), Louis de Broglie (1929) and Werner Heisenberg (1932). They displaced the Newtonian paradigm of physics, which had reigned for three centuries, which saw Nature as a machine that could be described with linear theories of cause-and-effect. The essence of the new physics was that reality is not what it seems to be to the rational mind. More startling was the conclusion that the human mind can never know what reality is because it is limited to models that can satisfy only its internal logic.

The science of economics lags physics by a century. Economists continue to model economies as machines whose efficiency can be increased by managing inputs to produce more outputs, thus also increasing the overall sizes of economies. The saving grace for physicists is that they attempt to model only the physics of the universe, as the winners of the 2021 Prize have done. Whereas economists try to develop rigorous mathematical proofs of social phenomena. Now, some economists are reluctantly accepting that economies are affected by fuzzy human and societal irrationalities. Recently, some have won Nobel Prizes for (finally) including emotions and concepts of ‘identity’ into their models. Which common sense alone should have revealed to them long ago.

Nature’s workings, humans

Systems’ sciences have advanced since the seminal meeting at the Santa Fe Institute in 1987. Engineers design machines, applying the laws of mechanics, to produce greater outputs with lesser inputs. Similarly, 20th century economists have been attempting to design more efficient economies, looking for levers to pull within them, such as prices of money and carbon, to improve their performance. Now they are beginning to look at Nature with greater respect, to understand how Nature designs itself. Nature is an adaptive system that produces innovations from within itself, such as new species. And species too adapt their abilities as Nature around them changes. Homo sapiens is the most complicated of all species because, unlike other species, it has intentions to master Nature, not just adapt to it. With human agency come complications of egos and ethics. Humans want to have power over Nature and over other humans too. Even when their actions are well-intended, they are ill-informed because they do not comprehend the power of the system of which they are only small parts, which the paradigm-changing physicists of the 20th century had realised.

A flawed construct

The harm that measurements derived from over-simplified models can cause to the health of complex self-adaptive social systems has become evident with the recent imbroglio of the World Bank’s Ease of Doing Business Framework. The intentions of the measurer will determine what is measured. Stock market indices, ease of doing business, and profits of firms are measures of what financial investors are looking for. Whereas levels of incomes at the bottom of the pyramid, and equity in ease of living for all human beings are better indicators of the health of a society and its economy. GDP is an indicator of the material performance of an economy; not its social and environmental health.

According to the paradigm-changing physicists of the early 20th century, the “logical”, linear, way of thinking is only a construct of the human mind. Nevertheless, economists (and even some physicists) persist in thinking that there must be causal, linear relationships amongst all variables in a system. New statistical methods (like Angrist and Imbens’) apparently enable causation to be separated from mere correlation. Jordan Ellenberg explains, in How Not to be Wrong: The Power of Mathematical Thinking, how mathematical methods can reveal hidden structures beneath the messy and chaotic structures of our daily lives,. He warns: “Mathematics is a way not to be wrong. There is a real danger that, by strengthening our abilities to analyse some questions mathematically, we acquire a general confidence in our beliefs, which extends unjustifiably to those things we’re still wrong about.”

Too little listening now

Along with fundamental epistemic limitations, western scientific methods are revealing ethical weaknesses too. The dignity of human beings is squeezed out to convert humans into quantities to fit into economists and social scientists’ mathematical equations. Scientists arrogantly claim they know best what is good for everybody; and that their views must prevail because they are more ‘rational’. There is too much mathematical calculation in the world of modern scientists; too little listening to people not like themselves.

We have the dialogue series, The Limits of Thought (1998), by David Bohm (who was nominated for the Nobel Prize in physics) and Jiddu Krishnamurthy, the Indian philosopher. Scientific models of the climate as a physical system only in which economists can determine a price of carbon that will make the world alright again are fundamentally flawed. Bohm had said that the end of science means the coming of western civilisation, in its own time and in its own way, into the higher dimensions of human experience. Those higher dimensions include humility within the world that has created the human mind, and which humans cannot logically explain.

The time has come for more equity in global governance, and for an “Eastern” philosophical way of thinking to save the world from a scientific apocalypse.

Arun Maira is the author of ‘Transforming Systems: Why the World Needs a New Ethical Toolkit’. He is also a former Member of the Planning Commission

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Printable version | Dec 2, 2021 5:37:02 PM | https://www.thehindu.com/opinion/lead/over-simplified-models-complex-social-systems/article37061493.ece

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