Evolution of Complex Systems

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Evolution of Complex Systems

• Lecture 13 Politics and economics interactions
  
• Peter Andras / Bruce Charlton
• peter.andras_at_ncl.ac.uk
• bruce.charlton_at_ncl.ac.uk

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Objectives

• Evolution by interaction between the systems of
  politics and economics
• Setting environmental selection pressures
• Change of rules
• Change of boundaries
• Emergence of interface systems

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Logic of power

• Power power to set rules of communications,
  power to distribute resources to regenerate and
  expand the society
• Political communications satisfy the logic of
  power identity of the political system

4
Political institutions

• Sets of constraints that define subsystems
• Parties, Parliament, election

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Political communications

• Everybody participates elections
• Professional political communications
  professional politicians

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Products

• Human communications produce quasi-permanent
  changes in the environment ? memories of human
  communications
• E.g., key, ball, book

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Services

• Temporary changes in the environment produced by
  human communications ? memories of human
  communications
• E.g., hair dressing, cloth tailoring

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Exchanging products and services

• Economic communications communications about
  exchanging products and services communications
  about object/service memories
• Special communication rules

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Money

• Universal exchange product
• Simplification ? expansion

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Banks

• Regulate the amount of money (create or absorb
  money)
• Modelling the economy

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Paper money

• Value by convention
• Further simplification and expansion
• Next electronic money

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Politics and rules

• Politics ? power ? setting the rules of
  communications
• Among other setting the rules for economic
  organisations

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Bell

• Biggest American telephone company (American
  Telephone and Telegraph Company ATT parent
  company of the Bell System, 1875)
• Practical monopoly

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Anti monopoly legislation

• Power talk about monopolies
• Winning power by anti monopoly agenda
• Translation into anti monopoly legislation

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Dividing the Bell

• Regional Bell companies 1984
• Opening up of local and long distance telephone
  markets

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Competition in the market

• New political environment represented by anti
  monopoly legislation
• New environmental pressures ? new kind of
  competition
• New companies emerged in the long distance
  market, and they won a large share of the market
  (e.g., Sprint, MCI, WorldCom)

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Economy and people

• Growth more money, more goods and services,
  better life
• Stagnation and shrinking less money, fewer
  products and services, lower quality and less
  enjoyable life

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Elections and economy

• Election time parties formulate their economic
  policy to win popular support
• Growth the government praises itself, opposition
  tries to find alternative critiques (e.g.,
  morality)
• Shrinking and stagnation government comes up
  with new vision and promises, opposition argues
  that everything is wrong because of the government

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Competition of parties

• Economy sets the stage for the competition,
  setting the selection pressures (e.g.,
  maintaining or changing current economic
  policies)
• Economic selection pressures contribute to the
  selection of parties in their competition in the
  context of the political system

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Money and politics

• Ministry of finance
• How much money is in the economy / should be in
  the economy ?

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Fiscal policy

• Taxation
• How much part of the money exchanged for other
  products or services should go to the government ?

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Monetary policy

• Regulation of the banks and of the amount of
  money present in the economy
• E.g., setting base interest rates, level of bank
  reserve

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Inflation

• Small moderate usual
• Change of money evaluations of goods and services

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Printing money

• Governmental intervention to pay the bill of the
  government (e.g., government loans, budgetary
  prescriptions)
• Germany 1920s, Brazil 1980s, Bulgaria 1990s

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Hyper inflation

• Rapid change of valuations of goods and services
  triggered by the availability of large amounts of
  money (e.g., money printed by the government)
• Unpredictable prices

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Politics and inflation

• Politics ? printing money
• Communication contents inflated in economics
• The rules of economics change in inflation
• Interpenetration of economics by politics

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Unequal distribution of economic resources

• Economic communications
• Need of economic resources
• Unequal distribution e.g. France late 18th
  century, Russia early 20th century

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Topics of politics

• Power talk what helps to get and keep political
  power
• Inequality of economic resources good topic

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Revolutionary politics

• Economics influences the rules of politics
• New politics / changing politics
• Interpenetration of politics by economics by
  changing the rules of politics

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Communism

• Political system about resource distribution
• Idea general equal sharing
• After 1917 / 1947

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Issues in communism

• Relevance of party documents
• Reporting according to plans

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Economics in communism

• Many economic decisions are political decisions
• They reference frequently political documents
• E.g., producing product for the deposit to keep
  workers working

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Small economics in communism

• Politics takes over a large part of economics
• Politics determines many economic exchanges and
  many formerly economic communications

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State services

• Railroads, energy services, telecommunications

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Operations in state economy

• Political logic mixed with economic logic
• Service should be provided at politically
  determined levels
• Typical large bureaucracy, deficit, low average
  and variance of quality

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Economics and state economy

• Political objectives and economic realities
• Rules influenced by economics

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Privatisation

• Economics takes over
• Political rules loose their effect
• Economic rules become more determinant

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Effects of privatisation

• If economics works in competitive manner short
  decrease of output, shedding bureaucracy, fast
  growth soon
• If the economics does not work in competitive
  manner continual need for state support, high
  prices and low service quality, still too much
  influence of politics

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Economics and privatisation

• Economics takes over a part of politics (a set of
  political communications)

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Economy and politics

• Money and regulation of the money
• Monetary politics

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Monetary politics

• Specialist political language
• Experts and expert MPs
• Ministry of finance
• New system growing at the interface

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Party finances

• Very important to run the party
• Payments, budget, party finances

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Party economics

• Treasurer
• Special communications and rules
• New system emerges at the interface party
  economics

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Summary

• Politics and economics
• Interpenetration and interaction
• Providing environmental selection pressures
• Change of rules
• Change of boundaries
• Emerging new systems at interfaces

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QA 1

• Is it true that the money is a form of economic
  communications ?
• Is it true that the logic of economics is is
  this communication leading to more or less money
  ?
• Is it true that deflation is a form of economy
  acting on politics changing its rules ?
• Is it true that nationalization is a way of
  politics acting on economics changing its
  boundaries ?

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QA 2

• 5. Is it true that revolutionary politics is the
  effect of the economics on politics by changing
  the rules of politics ?
• 6. Is it true that by allowing pubs to keep open
  after 11pm the competition in the pub/club sector
  of the economy is changing ?
• 7. Is it true that the economy is always the
  single major issue of opposition talks at
  elections ?
• 8. Is it true that there are several interface
  systems between politics and economics ?