Doctor’s Note – Issue 14 – Expanding Bounded Rationality

In this issue: Systems thinking failure / Ideas lying around / Seeing change creates change / The Linkhole / Books

Welcome to Issue 14 of Doctor’s Note. If you were forwarded this by a friend, you can sign up here. This is issue is all about systems thinking, human behaviour and the potential for radical change. The challenge facing us is to think long-term during a crisis that forces short-term thinking.

Systems thinking failure

I committed a cardinal sin of systems thinking in the last issue of Doctor’s Note. Well, a little bit, at least. 

I mentioned the fact that the annual influenza epidemics are estimated to lead to about 290,000 to 650,000 respiratory deaths per year (the range is so broad, because of the lack of data gathering in developing countries). That’s a lot, but spread over time and normalised in society, plus there are vaccinations and treatments. 

I intended to put the panic buying of toilet paper in perspective, I did not mean to downplay the seriousness or rate of contagion of COVID–19. I regret the sloppiness, but it’s worth using it as a case-study in systems thinking.

The systems thinking misstep was a underestimation of exponential growth. This happens, time and time again. When I mentioned at the weekend that Germany’s then ~3,500 infections would be 10,000 by the end of this week, people looked at me shocked. They’re on around 9,000 right now, so I underestimated that significantly too. To better understand, you should read Tomas Pueyo’s analysis that’s gone, er, viral. (I wonder if people might stop using that phrase now?)

Exponential growth is very counter-intuitive to our brains – we understand linear relationships much better. Donella Meadows, in her classic work, Thinking in Systems, has this to say (she was referring to arms, wealth and violence races):

“The escalation is exponential and can lead to extremes surprisingly quickly. If nothing is done, the spiral will be stopped by someone’s collapse—because exponential growth cannot go on forever. 

The Way Out: The best way out of this trap is to avoid getting in it. If caught in an escalating system, one can refuse to compete (unilaterally disarm), thereby interrupting the reinforcing loop. Or one can negotiate a new system with balancing loops to control the escalation.”

All the social distancing advice has been about this renegotiation and trying to interrupt the reinforcing loop.

Meadows also talked about how difficult it is to change a system when you’re inside it. It seems impossible, until you change perspectives:

“Change comes first from stepping outside the limited information that can be seen from any single place in the system and getting an overview. From a wider perspective, information flows, goals, incentives, and disincentives can be restructured so that separate, bounded, rational actions do add up to results that everyone desires. It’s amazing how quickly and easily behavior changes can come, with even slight enlargement of bounded rationality, by providing better, more complete, timelier information.”

There’s nothing like a global crisis for bounded rationality enlargement, which brings me on to Naomi Klein.

Ideas that are lying around

Naomi Klein, in a video on The Intercept called Coronavirus Capitalism, leads with a famous quote from Milton Friedman:

“Only a crisis - actual or perceived - produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.”

Klein continues to explain the potential dangers and opportunities of “ideas that are lying around.” On the one side, the risk is that the 1% will push for more corporate bailouts and tax breaks for the extremely wealthy in the name of getting the economy back on its feet, but that will actually create even more inequality and make destroy the social support safety net for the most vulnerable. 

On the other, the opportunity to make an “evolutionary leap” from where we are now and put that funding into initiatives that are collectively better for the planet and society.

The rest of Friedman’s quote is either scary or encouraging, depending on which side of the political aisle you’re viewing it from:

“That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”

As airlines, automotive and the oil industry lurch into crisis and potential collapse, it’s a very real question to ask how much they should be propped up. Or, if they, are, with what conditions they would be supported. Matt Stoller notes:

“More broadly, policymakers are recognizing that structuring markets to focus entirely on cost and efficiency, even if it seems like a reasonable at the time, can lead to a situation where you get mass shortages.

“There’s not a lot of good news these days, and I’m honestly kind of frightened. But the one silver lining is that it has become clear that the way we have been running our society for four decades is short-sighted and irresponsible. Hopefully the price we will have to pay to learn this lesson won’t be too high.”

The other thing that is clear is what seemed unimaginable two weeks ago—radically reducing air travel, for example—is now possible. Bounded rationality has been expanded.

That is, indeed, an opportunity and, as I’ve written before it’s worth remembering that all organisational and societal rules are, in the end, bureaucratic fictions. 

Departmental boundaries or corporate policies do not really exist any more than borders between countries, money or laws are real. They are shared, intersubjective “truths” (myths), albeit ones that keep civilisation as we know it ticking along, more or less.

All norms seem fundamental until they are not. From slavery and eugenics to gender and religious beliefs, diehard rules crumble in the face of new shared mythologies. Storytelling plays a key role in reforging those rules, because stories provide new perspectives that changed shared “truths”.

A virus that transcends these man-made imaginary boundaries and highlights just how illusionary they really are. Meadows again:

You can’t navigate well in an interconnected, feedback-dominated world unless you take your eyes off short-term events and look for long term behavior and structure; unless you are aware of false boundaries and bounded rationality; unless you take into account limiting factors, nonlinearities and delays. You are likely to mistreat, misdesign, or misread systems if you don’t respect their properties of resilience, self-organization, and hierarchy.

We’ve been telling ourselves new stories in the last two weeks and they’re changing day-by-day. The challenge is to think long-term during a crisis that forces short-term thinking.

Seeing change creates change

Gerry McGovern has just written a new book called World Wide Waste:
How digital is killing our planet—and what we can do about it
. It’s an extremely important issue, given the mantra of “more tech will solve climate change” and the illusion “digital” is somehow ephemeral and without a carbon footprint.

My biggest fear about the COVID–19 crisis is that it will take up everyone’s mental bandwidth and budgets and be an excuse not to do anything about sustainability for some time. If we don’t, we’ll head into a much worse climate-change disaster that unfolds in unstoppable slow motion.

Brett Jenks’s piece, Keeping Up With Corona and Other Lessons For Climate Activists, describes another way to change our perspective: 

We change when we see those around us changing, especially when we can observe local effects and local responses. Seeing change around us gives us permission to talk about the problem. (“This is crazy. I’ve been washing my hands ten times a day.”) Seeing change gives us insight into potential solutions. (“We established a travel ban. We’re all teleworking. We just bought a slew of videoconferencing licenses.”) Seeing change and taking smalls steps to enact change ourselves creates subtle shifts in our identity. (“No, of course we’re not going out tonight; we don’t want to be transmitters.”)

Human beings are incredibly social, which is why social distancing and how it’s come about is such a fascinating experiment. I often tell others: people don’t flee the theater when they see smoke; we flee the theater when we see other people fleeing the theater. This has been proven dozens of times by researchers who make the point that others’ behavior is way more influential to us that any alarm bell or scientific evidence. Long before science, pre-literate humans knew that if everyone started running from a threat, she who ran last was probably lunch.

Crucially, the scientists’ responses, warnings and data on the coronavirus haven’t simply been dismissed as lefty ideology as they have been with climate change. Even the arch Bullshitter in Chief has climbed down, along with his Fox News cronies. Perhaps a silver lining will be a renewal of respect for experts.

The Linkhole


Thanks for reading

That’s it for this issue. If you liked it, please consider forwarding it to a friend or colleague to sign-up. I really do appreciate all the shares and feedback. 

You might also like my podcast, Power of Ten, which is all about design operating at different levels of “zoom,” but mainly consists of me talking to people smarter than me from a broad range of disciplines. I’m putting together a new one called The Big Remote – more on this next time.



Photo by  Émile Séguin on Unsplash (social distancing, geddit?)