Background

Panarchy is a model that seeks to explain the evolution of complex systems, developed firstly by Buzz Holling through his observation of the adaptive cycle of forests[1]. The forest cycle follows a process of growth/exploitation, conservation, release and reorganization/renewal. At first, there is rapid growth as new species establish themselves in a recently disturbed environment. As the vegetation becomes denser, and the linkages within the system proliferate, the forest moves into a slower-growing state of conservation. It becomes increasingly stable within, and highly adapted to, a limited number of conditions. Efficiency, through the reuse of existing structures and increased connectivity, is traded for lower resilience. A disturbance that exceeds the reduced bounds of resilience then causes the forest to “crash” to a simpler state that releases the material and energy accumulated in the earlier adaptive phases. A highly uncertain phase of renewal can then start, during which novel combinations of species may establish themselves. These can then rapidly develop during a new growth phase. This adaptive cycle has been found to operate across many different natural systems.

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Figure 1: Panarchy Model from The Sustainable Scale Project.

The Panarchy model accepts the fundamentally dynamic nature of ecosystems, and moves away from the previous assumptions of linear and predictable natural systems that could be managed through actions targeted at one variable, such as the maximum sustainable fishing catch. Instead a panarchy approach accepts that components of complex systems may actively adapt to changes within their environments, creating surprising outcomes. Ecological systems are non-linear, and capable of moving from one stable state to another, very different, one. Within an overall system there are nested sets of adaptive cycles, with the larger cycles operating more slowly than the smaller ones. The different cycles can interact, with the larger ones tending to play a stabilizing role. At a critical point though, changes at different scales may interact and reinforce each other leading to systemic collapse.

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Figure 2: Adaptive processes at different scales within the Panarchy Model from The Sustainable Scale Project.

For example, the warming of the Earth’s climate has been progressing at a slower rate than the shrinkage of the Arctic Sea Ice. The latter process was triggered once the Earth’s climate warmed above a trigger level for the sea ice cycle. The loss of the sea ice may greatly speed up the increase in the temperature of the Earth’s climate, through the greatly reduced albedo of dark open water compared to the white ice. Over a much longer timeframe, the weathering of rocks will remove the additional carbon dioxide released into the atmosphere by human emissions. Such linkages call for a completely different approach to ecosystem resilience, as Holling notes “to strengthen ecosystem resilience, we need to integrate processes that cover metres to tens of thousands of kilometres, minutes to millennia”[2].

Applicability to Human Systems

Do the human complex systems called civilizations follow a panarchic process of growth, collapse an renewal? Human history is characterized by the rise and fall of great civilizations, with the crash following the climax – much like the collapse of a climax forest before the disturbance which creates it’s destruction. The development of any civilization is limited by the amount of usable energy available to it, and the efficiency of energy use. The more energy and greater efficiency, the greater the percentage of the population that can be devoted to things other than getting that energy. More energy can also feed a greater number of machines and extend human capabilities. Agricultural societies are limited by both the available bio-mass (predominantly food, fodder for animals, and wood) and the efficiency of the humans, horses, and other draft animals, in converting that bio-mass into useful energy. Human technology, through such things as the plough, wind-mill, and sail boat, can stretch that limit, but not fundamentally remove it. Defeating other societies, and taking their land and enslaving their people, can also increase the amount of energy available. None of these factors removes the overall limit of complexity and development that agriculturally-based societies operate within. At their peak, civilizations may be utilizing the available bio-mass to the greatest extent possible. This would leave no reserves for dealing with new challenges – such as an attack from another civilization, ecological degradation, or climatic changes.

The linkage between access to energy resources and the level of social development and complexity of a given civilization was also noted in the work of Tainter, who states, “Human societies and political organizations, like all living systems, are maintained by a continuous flow of energy … More complex societies are more costly to maintain than simpler ones, requiring greater support levels per capita. As societies increase in complexity, more networks are created among individuals, more hierarchical controls are created to regulate these networks, more information is processed, there is more centralization of information flow, there is increasing need to support specialists not directly involved in resource production, and the like”[3]. These increases in network density, and information flows, mirror the conservation phase of the panarchy process.

Tainter proposes four concepts through which to understand why complex societies collapse:

– Human societies are problem-solving organizations;

– Socio-political systems require energy for their maintenance;

– Increased complexity carries with it increased costs per capita; and

– Investment in socio-political complexity as a problem-solving response often reaches a point of declining marginal returns.

As societies reach the zenith of their scale and complexity, they both utilize all of the bio-physical resources available and become increasingly brittle as network dependency, and thus internal inter-dependency, increases. When a new challenge arrives it will be lacking in the required energy to solve the new problems and inflexible in its responses. With the collapse of the civilization, its supporting ecology is released to recover from its intensive human use and start the process of renewal. In addition, the remnants of the society are freed from the social institutions and limitations that were previously in place. A time of experimentation and new possibilities can come about. From this perspective, the so-called “dark ages” can be seen in a much more positive light.

Ian Morris[4] developed an index of social development and noted that only three civilizations could be identified as reaching the low 40’s on his index, those of the Song Dynasty, the Roman Empire, and modern civilization. As Morris puts it “If someone from Rome or Song China had been transplanted to eighteenth-century London or Beijing, he or she would certainly have had many surprises … Yet more, in fact much more, would have seemed familiar … Most important of all, though, the visitors from the past would have noticed that although social development was moving higher than ever, the ways people were pushing it up hardly differed from how Romans and Song Chinese had pushed it up”[5].

What allowed modern civilization to put off the seemingly inevitable process of collapse and renewal? First of all, the acquisition by Europe of the resources of multiple other continents through conquest, and then the utilization of fossil fuels. The latter provided incredibly dense energy sources on a scale that dwarfed the energy that had previously been available. For the past two centuries modern society has been able to grow far beyond the previous levels of scale and complexity, utilizing an exponentially amount of fossil fuel energy to delay the inevitable peak and collapse. As increasing amounts of energy have been required to keep the growth phase going, even just a stabilization in the amount of energy available may create a crisis for modern society.

The work of Hall[6] and others[7] has pointed to a declining level of net energy (the energy embedded in the extracted fuel minus the energy utilized in the exploration and extraction processes) for newly developed fossil fuel resources, as the “low hanging fruit” deposits are utilized first. This declining net energy is offsetting increases in production volumes, and may also render future exploration and development uneconomic. The result may be that the decline in fossil fuel production after the peak may be much more rapid than the prior increases. The utilization of the vast sources of fossil fuel energy has also allowed human societies to extract mineral resources at much lower ore concentrations than would otherwise have been possible. Bardi argues that this process of utilizing ever-increasing amounts of energy to extract minerals from lower and lower ore grades is approaching its economic limit for centrally important metals such as copper[8]. The effects of any peak in net energy may therefore be amplified by reduced availability of economically extractable minerals.

Since the utilization of fossil fuels, the ongoing growth of the economy does seem to have an internal cycle of growth followed by periods of destruction that cleared the way for new innovations. Schumpeter believed that the period of destruction was caused by some of the new innovations that disrupt the previous economic structures and relationships[9]. He proposed a set of nested business cycles, which interacted in very much the same way as the adaptive processes within the panarchic model. The most well known of these is the Kondratieff cycle.

The global financial system can be seen as a complex adaptive sub-system within the overall economic system (which itself is a sub-system of human society) which has not been allowed to follow the required stages of crash and renewal. In this case, the actions of governments and central banks to forestall financial crashes during the period from the early 1980’s to the present day have allowed the financial system to grow to a scale and complexity well beyond what would have been possible without the repeated forestalling of collapse. The result has been to reduce the resilience of the financial system to the point where historically low interest rates and extensive ongoing financial support are required to maintain its viability. A financial crash tends to create an economic crash, given the centrality of the financial system to the co-ordination of the economy, mirroring the revolt panarchy process where changes at a lower scale can drive changes at a higher-scale one. The reverse is also possible, where an economic recession can lead to a financial crash. A positive feedback loop can then be triggered, as the changes at different scales reinforce each other.

Human societies are greatly affected by the cultural models, belief systems, through which they make sense of the world. These are unique to human systems, and thus may provide a divergence with the panarchy model. Through such processes as cognitive dissonance[10] human groups can reject new knowledge and experiences that challenge fundamental beliefs. This holds the possibility that the required change in belief systems will significantly lag the start of the release period, possibly severely impacting the ability of human society to effectively respond to its new circumstances. Such delays between changes in beliefs, when new contradictory information or models have become available, were shown to be applicable to even scientific fields by Kuhn[11].

Implications For Economic & Social Policy

An acceptance that the human society and economy are governed by the same nested adaptive cycles as ecosystems, leads to an acceptance that growth is only one part of a healthy adaptive system. For such a system to remain healthy it must experience regular periods of contraction and radical reorganization. Such an insight stands in deep contrast to a Keynesian philosophy that believes that fiscal and monetary policy should be utilized to offset the contractionary part of the cycle. It also challenges the neo-classical tradition that views the economy as a self-correcting system that tends towards an efficient equilibrium point. Instead, an economy may experience sudden and significant changes that move it from one equilibrium point to another that exhibits lower levels of social welfare. This was the case during the 1930’s.

Preventative measures would seek to facilitate both more regular, but smaller, periods of reorganization and limit the social impacts of such reorganizations (e.g. increased unemployment). In addition, the preservation of institutions, resources and knowledge required for the next growth phase would be an important consideration. In this light, the extension of the economic and growth cycles through the utilization of fossil fuels, and the extension of the financial system growth cycle through repeated bailouts and rescues, could be seen as creating a much larger contractionary phase in the future. Resilience continues to be degraded, and network complexity and interdependence intensified, rather than the required simplification being allowed to take place. With an earth system that is being pushed into a contractionary cycle by the huge scale of humanity’s ecological footprint, and the possible peaking of fossil fuel energy on the horizon, both ecological and human cycles may interact in a rapidly reinforcing fashion. Better to release some of society’s adaptive cycles prior to the challenges that may be delivered by resource constraints and multiple probable ecological crises.

One of the system rigidities produced by the extended conservation phase that human societies have been experiencing are the dense, strong, interconnections between sub-systems as the global economy becomes more integrated and extensive. Local production has been replaced by global production networks that tightly integrate many regions together, with the final assembly of a product possibly involving subsystems supplied by a myriad of suppliers based in many different countries. Just-in-Time delivery systems have also removed many of the local stockpiles of goods in the name of efficiency. The branches of national, and global, banks have replaced local financial institutions. Overall, there has been the growth of very large organizations, both private and public, upon which the system depends. Examples are the “Too Big To Fail” financial institutions, large corporations in the agricultural, retail, energy and other areas, together with, central banks. Locally produced food has been replaced by the production of cash crops for export, with countries being made more dependent on imports for basic foodstuffs. In the case of Europe, even national currencies and governance structures have been replaced by the Euro and European-level organizations. Local variability, and the range and scope of locally adaptive changes have been reduced. The buffering effect of local production and buffer stocks has been removed. The overall global system may have become much more efficient, but much of its resilience has been the price of that efficiency. The system has also become more tightly fitted to, and therefore dependent upon, its current ecological and resource niche. Complicating, and deepening, any reorganization phase.

Another issue is the reduction in heterogeneity and redundancy, as globalization concentrates and homogenizes organizations, products, cultures, and worldviews. A single monoculture is much less resilient to challenges than one with much variation and duplication. In the latter, the removal of a single subsystem may be dealt with successfully through the ability of other subsystems to take over at least part of the functions provided by the failed one. Through the impacts of industrial agriculture, a limited set of crop variants has replaced a much greater variety of local variants in many parts of the world. These crop variants are dependent upon a wide range of industrial inputs, from herbicides and fertilizers to farm machinery and the oil that fuels them. On a cultural and worldview level, Micheals[12] argues that a single master story based upon economics has largely forced out competing narratives. He states:

“In … the twenty-first century, the master story is economic; economic beliefs, values and assumptions are shaping how we think, feel, and act. In a monoculture … that single perspective becomes so engrained as the only reasonable reality that we begin to forget our other stories, and fail to see the monoculture in its totality, never mind question it. We accept it as true simply because we’ve heard its story so often and live immersed in it day after day. The extent to which we accept that monoculture unquestioningly and live by its tenets is the extent to which our lives are unconsciously being shaped by it.”

Such as unquestioned belief system greatly restricts the possible corrective actions that can be taken, by restricting the conceptual framework within which such actions will be assessed. Some possible actions may also be explicitly excluded from, or simply not part of, the conceptual framework that stems from the belief system. Due to this, human society may be unable to even contemplate actions that would be beneficial to its ability to successfully traverse the process of reorganization.

Beneficial policies would be those focused on fostering diversity in all forms, and forestalling economic and social concentration. Strong anti-monopoly and anti-monopsony laws would be required, with significant limitations on financial takeovers of one firm by another. In addition, an increase in local economic self-sufficiency, reversing some of the previous strides in globalization would be beneficial. The fostering of creativity through the free flow of knowledge, as with a healthy ecosystem, would argue for a dismantling of much of the current intellectual property rights legal infrastructure. This greatly constrains the flow of knowledge, and in many cases represents the privatization of the commons. A diversity of world-views would also be beneficial, and therefore a political system that provides space and support for divergent beliefs and that respects, rather than attempts to acculturate, indigenous communities.

Overall, the panarchy model contrasts greatly with the hegemonic economic and social system, together with the beliefs that underlie it. The probability of the current configuration and belief systems of human societies being problematic for both the contractionary and recovery periods is highlighted. With the extension of the conservation period through the energy provided by fossil fuels, together with the lack of a correctional cycle in the global financial system in the past few decades, the scale of the inevitable release cycle will be much larger than it otherwise would have been. Therefore, any actions that seek to mediate that cycle and facilitate the reorganization cycle are much needed.

References

[1] Homer-Dixon, Thomas (2006), The Upside of Down, Knopf Canada

[2] Gunderson, Lance H. & Holling C.S. (2002), Panarchy: Understanding Transformations in Human and Natural Systems, Island Press

[3] Tainter, Joseph (1988), The Collapse of Complex Societies, Cambridge

[4] Morris, Ian (2010), Why the West Rules-for Now: The Patterns of History, and What They Reveal About the Future, Farrar, Strauss, and Giroux

[5] Morris, Ian (2010), Why the West Rules-for Now: The Patterns of History, and What They Reveal About the Future, Farrar, Strauss, and Giroux

[6] Hall, Charles A. S. & Klitgaard, Kent A. (2011), Energy & The Wealth Of Nations, Springer

[7] Hansen, Doug & Hall, Charles A. S. (2011), New Studies In Energy Return On Investment, Sustainability. Accessed on October 5th, 2014, at http://www.mdpi.com/journal/sustainability/special_issues/New_Studies_EROI

[8] Bardi, Ugo (2014), Extracted, How the Quest for Mineral Wealth Is Plundering The Planet, Chelsea Green

[9] Schumpeter, Joseph (2010), Capitalism, Socialism & Democracy 1947, Kessinger Publishing

[10] Cooper, Joel (2007), Cognitive Dissonance: 50 Years of a Classic Theory, Sage Publications

[11] Kuhn, Thomas (1970), The Structure of Scientific Revolutions, University of Chicago Press

[12]Micheals, F.S. (2011), Monoculture: How One Story is Changing Everything, Red Clover Press