The Cassandra Factor

A New Scientist article opines that some disasters are preceded by a slowing down of some characteristic ‘heart beat’.

From a Cybernetic point of view the key thing is that (as Keynes and Whitehead had previously noted) regular behaviour implies some sort of regulation, and that in ecosystems this typically comes about through predator-prey relationships, which in simple cases give rise to cyclical behaviours. As the article notes, a weakening of a regulatory factor can lead to a noticeable lengthening in the period of the cycles or – more generally – an increasing autocorrelation, preceding the failure of regulation and hence the crash.

The article considers the ‘financial whirl’, noting that any successful method of predicting collapse would ‘quickly invalidate its own forecasts as investors changed their strategies to avoid its predictions.’ This reflect Keynes’ thoughts. But how general is their model? The editorial refers to the BSE crisis in which the introduction of a cycle into the food ‘chain’ may have led, decades later, to the emergence of prions, causing BSE. This seems the opposite of the situation described in the article.

From a Cybernetic point of view, echoing Whitehead and Keynes, if we observe a system for a while we expect to be aware of those things that are regular, rather than what is ephemeral. This regularity reflects the action of regulatory systems, including their structure and strengths. Any change in regulation can lead to the end of an epoch, and may be perceived as a disaster, not just the failure of one element of regulation. Thus if an epoch is characterised by behaviour with a characteristic period, a speeding up or slowing down can both indicate significant change, which could be followed by disaster. But equally, a change may lead to an innovation that is perceived as a benefit. From this and related Cybernetic considerations:

  • A stable regulatory regime implies a stable characteristic behaviour in the thing regulated, so that change in what had been regulated indicates a change in regulation, and hence a significant change in behaviours, good or bad. This includes a change from a heart-beat that varies in frequency to one that is unhealthily ‘pure’.
  • A stable regulatory regime will rely on stable information inputs, which can only be effective if there is global stability, including lack of learning and innovation. So we should not expect any epochs to last forever, unless the system is already dead.
  • A regulatory system needs to cover both short-term and long-term aspects of behaviour. From an efficiency point of view it might focus on short-term issues most of the time, opening up and exploring longer-term issues periodically. It would be unfortunate to confuse this with the onset of a crisis, or to seek to inhibit it.
  • There is no widespread common appreciation of what makes for ‘good’ regulatory systems.

Dave Marsay

See also my Modelling the crash.


About Dave Marsay
Mathematician with an interest in 'good' reasoning.

One Response to The Cassandra Factor

  1. Pingback: INET: Adair Turner interview | djmarsay

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