Donella H. Meadows, Thinking in Systems: A Primer
Abstract
An accessible introduction to systems theory, and the way it explains economics in terms of irrational human behaviour.
Essay
Contrary to Adam Smith, economies are often irrational. Consider cod. As stocks decline, prices go up. Free market models would say that as this happens, fewer consumers can afford to buy fish, so fewer cod are caught, so stocks can recover. In actuality, of course, as stocks decline and prices increase, fleets use elaborate technologies to chase the last few, very valuable shoals, leading to the permanent destruction of a once renewable stock.
This example encapsulates the value of systems theory. Rather than viewing price as the key regulator of society, systems theory perceives that other, behavioural factors matter, and it thereby offers a counter-intuitive way of approaching the ecological economy. Because in some countries eating fish has a social value, for example, people will pay for it whatever the price. This single effect sends the relation between supply, price and demand off in a wholly different direction.
Whilst the jargon of systems theory might at first seem off-putting, by employing numerous real-world examples, Thinking in Systems offers an excellent introduction. Meadows very lucidly shows how well it can model intractable problems, simply by empathising with how people behave irrationally, and by appreciating how that behaviour can have massive, unpredicted effects through powerful feedback loops. Written in 1993, but published posthumously in 2008, many of Meadows' examples reflect Reaganite economics or Cold War politics, rather than contemporary environmental issues. However, it is a mark of the primer's success that it will not take much effort for readers to apply systems theory to the latter for themselves.
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Bibliography
- Meadows, Donella H. Thinking in Systems: A Primer. London: Earthscan, 2009. ISBN 9781844077267. £14.99.240pp.
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