Clay Shirky on The Collapse Of Complex Business Models

I have some problems with the unitary model of complex societies that Shirky relies on in this analysis, but let’s poke at it a bit:

Clay Shirky, The Collapse Of Complex Business Models

[…]

In 1988, Joseph Tainter wrote a chilling book called The Collapse of Complex Societies. Tainter looked at several societies that gradually arrived at a level of remarkable sophistication then suddenly collapsed: the Romans, the Lowlands Maya, the inhabitants of Chaco canyon. Every one of those groups had rich traditions, complex social structures, advanced technology, but despite their sophistication, they collapsed, impoverishing and scattering their citizens and leaving little but future archeological sites as evidence of previous greatness. Tainter asked himself whether there was some explanation common to these sudden dissolutions.

The answer he arrived at was that they hadn’t collapsed despite their cultural sophistication, they’d collapsed because of it. Subject to violent compression, Tainter’s story goes like this: a group of people, though a combination of social organization and environmental luck, finds itself with a surplus of resources. Managing this surplus makes society more complex—agriculture rewards mathematical skill, granaries require new forms of construction, and so on.

Early on, the marginal value of this complexity is positive—each additional bit of complexity more than pays for itself in improved output—but over time, the law of diminishing returns reduces the marginal value, until it disappears completely. At this point, any additional complexity is pure cost.

Tainter’s thesis is that when society’s elite members add one layer of bureaucracy or demand one tribute too many, they end up extracting all the value from their environment it is possible to extract and then some.

The ‘and them some’ is what causes the trouble. Complex societies collapse because, when some stress comes, those societies have become too inflexible to respond. In retrospect, this can seem mystifying. Why didn’t these societies just re-tool in less complex ways? The answer Tainter gives is the simplest one: When societies fail to respond to reduced circumstances through orderly downsizing, it isn’t because they don’t want to, it’s because they can’t.

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. Tainter doesn’t regard the sudden decoherence of these societies as either a tragedy or a mistake—”[U]nder a situation of declining marginal returns collapse may be the most appropriate response”, to use his pitiless phrase. Furthermore, even when moderate adjustments could be made, they tend to be resisted, because any simplification discomfits elites.

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.

I think where Tainter’s analysis goes sideways for me is the characterization of a society as a monolithic system, that in its totality is resistent to change. When viewed microeconomically, people are constantly innovating. Just consider agriculture: while one group is inventing genetically modified crops that are drought resistent, another is going back to older techniques of farming and strains of plants that require less water. These aren’t mutually supporting: they are divergent trends in the larger social system.

Besides, even Tainter admits that one person’s collapse is another person’s advance. After the fall of Rome, the rich patricians fell on hard times, but the average life of many former ‘Romans’ living in the outskirts improved dramatically (see wikipedia).

Tainter may be conflating very different sorts of societal collapse — like drastic climate change on the Chacoans’ ecology, destruction of large food animals by the Mayans, and economic and military overreach by the Romans — into a single economic theory of collapse. You might as well adopt ‘shit happens’ as a unifying theory.

But Clay starts with Tainter’s Collapsonomics and builds on it, examining the power structures and bureacracies of the media world:

One of the interesting questions about Tainter’s thesis is whether markets and democracy, the core mechanisms of the modern world, will let us avoid complexity-driven collapse, by keeping any one group of elites from seizing unbroken control. This is, as Tainter notes in his book, an open question. There is, however, one element of complex society into which neither markets nor democracy reach—bureaucracy.

Bureaucracies temporarily reverse the Second Law of Thermodynamics. In a bureaucracy, it’s easier to make a process more complex than to make it simpler, and easier to create a new burden than kill an old one.

Clay casts bureaucrats as the heavies in this drama, like the Writers Guild of America blocking user generated content finding its way into TV shows, blocking innovative ideas for media, and effectively painting the industry into a corner.

In the future, at least some methods of producing video for the web will become as complex, with as many details to attend to, as television has today, and people will doubtless make pots of money on those forms of production. It’s tempting, at least for the people benefitting from the old complexity, to imagine that if things used to be complex, and they’re going to be complex, then everything can just stay complex in the meantime. That’s not how it works, however.

[…]

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.

When complex social systems collapse, it starts by people simply wandering away, going over the hill. They don’t pay their taxes to Rome anymore. They ignore copyright protections. They accept inferior web hosting for $6/month from some low rent company, instead of paying AT&T $60. They make videos with a Flip camera instead of a $20,000 Betamax.

The historians generally write from the perspective of the overlords, and so the Fall Of Rome is about senators and caesars stabbing each other in their histories, not about the serf slipping away with two geese and a sack of grain, headed back to the outlands, or the soldiers turning their swords into plowshares, returning to the practical arts of farming.

Perhaps this is just another case of good enough triumphing over too much, and the self-correction in the system being viewed as the collapse of the old and the rise of the new.