(2021-11-10) Chin What I Learnt From Complexity

Cedric Chin: What I Learnt From Complexity. Complexity by M Mitchell Waldrop is one of those weird books where I finish reading it and think "ahh, that was a good yarn, it's totally not useful" and then proceed to have my entire worldview changed in the subsequent months.

as compelling as a story about any scientific movement can be

the second and third order implications of the idea are pernicious as hell; it has affected the way I see everything around me.

Complexity tells the origin story of the Santa Fe Institute.

Street traffic is an excellent analogy for complex adaptive systems because most of us have had very visceral experiences with traffic

We’ve also all had to make commuting decisions that take traffic into account.

Complexity, of course, observes that much of the world is like traffic. But what is really important to notice here is that there are two possible approaches to thinking about traffic:

You may attempt to derive an ‘analytical’ solution

The second approach is to just give up and declare that no ‘analytical’ solution is possible, and argue that we should treat the system as something … different.

The Santa Fe Institute was created to explore that second approach

How has the Santa Fe Institute performed in the decades since the events of the book? This is decidedly more mixed than I would’ve wanted. It is tempting to look at the math coming out of the institute — and the apparent lack of influence it has had on the mainstream versions of its fields — and conclude that it is mostly a fringe approach

But that’s besides the point, I think. If you are a business investor or an operator, you might not be so interested in the various contributions that Complexity Science has made across the varied fields it touches. Instead, you are more likely to be like me — interested in better models of reality, so that you may make better decisions

the idea of a complex adaptive system is in itself useful, and it is what has haunted me for the past year.

Here is one worldview implied by a complex adaptive system: you cannot predict what will happen in the future. History is like traffic: even tiny events might snowball into world wars.

But here’s the kicker to that worldview: “… and therefore you must learn to act without prediction.”

what does it even mean to act without predicting the future? Isn’t it true that making decisions is to bet on some future state of the world?

Compare these two worldviews:

“There is no compelling use case in crypto, so I do not believe I will invest in anything in the space

But, consider this stance instead: “I have no idea what crypto will become, and I will not attempt to guess.

my stance is to make small bets, clear my head of preconceptions, and just watch for the hottest areas of the space where experimentation and recombination seems to be happening the fastest.”

If we map the two opinions to, uh, traffic, the former opinion is basically “I want to be able to predict traffic; but I cannot predict a precise commute time so I won’t commute”; the latter is “I cannot predict traffic, but I can take action to uncover the quirks of traffic flow in our current road system

Here’s another example. Let’s say that you want to start a company. “I have a vision of the future and I will do everything possible to turn that vision into reality” is one narrative that is available to the startup founder. Another, similar one is “I think X is a huge trend, I will exploit this opportunity in the market by starting a company that does Y, which is related to X.”

Contrast this with the following type of reasoning: “I’m going to go after X. There’s something there that’s interesting that I can’t place. I can’t predict how I’m going to win right now, but I think that if I start with what I have, make bets that won’t kill me, and adapt quickly to whatever I uncover during the course of execution, I will be able to shape the future as part of a complex adaptive system.”

The former is ‘causal reasoning’, which is taught in MBA classes; the latter is ‘effectual reasoning’, which appears to be what entrepreneurial thinking is actually made of

Another example. Geopolitics is a complex adaptive system

So contrast the two quotes below: (Geopolitical analyst Peter Zeihan): So the entirety of the Chinese success story, the entirety of the Panda Boom happened during the most internationally abnormal period in human history.

The question on the backside is not, will China survive the fall? It won't. The question is what becomes of the Asian power balances after China's fall?

Zeihan is charismatic. He expresses geopolitical narratives with the supreme confidence of a forecaster

Contrast that to retired Singaporean diplomat Bilahari Kausikan, who learnt his statecraft under Lee Kuan Yew: With both sides inclined towards prudence, I have little regard for mechanistic theories of US-China relations such as the so-called ‘Thucydides Trap’.

the theory of the ‘Thucydides Trap’ does not place sufficient emphasis on human agency: to recognise that there may be a Trap is to go a long way towards avoiding it

Kausikan, on the other hand, like Lee Kuan Yew before him, does no more than to describe the tendencies of the state actors as he knows them

understandably shaped by their respective careers. Zeihan’s job is to sell books and consulting engagements. Kausikan’s job is to ‘take the world for what it is, not what (tiny, insignificant) Singapore wishes it to be’, in order to protect Singaporean interests.

One final example: I’ve found it very useful to view an organisation through the lens of a complex adaptive system.

if organisational behaviour was truly emergent and adaptive — then the skill of shaping an organisation should rely less on perfect prediction and more on good observation

In the Hacker News comments in response to that piece, however, people demanded that the skill take on the form of an analytical solution instead

What is interesting to me is that before reading Complexity, I thought very similar things

Reading Waldrop’s Complexity made me realise that whatever skill I had at org design was like any other skill in the face of a complex adaptive system: it was a skill of iteration in response to observation of a system