❄️Systems Thinking: On Shocks (Quotes)

"Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better." (Nassim N Taleb, "Antifragile: Things that gain from disorder", 2012)

"If you want a system - economic, social, political, or otherwise - to operate at a high level of efficiency, then you have to optimize its operation in such a way that its resilience is dramatically reduced to unknown - and possibly unknowable - shocks and/or changes in its operating environment. In other words, there is an inescapable price to be paid in efficiency in order to gain the benefits of adaptability and survivability in a highly uncertain environment. There is no escape clause!" (John L Casti, "X-Events: The Collapse of Everything", 2012)

"Stability is often defined as a resilient system that keeps processing transactions, even if transient impulses" (rapid shocks to the system), persistent stresses" (force applied to the system over an extended period), or component failures disrupt normal processing." (Michael Hüttermann et al, "DevOps for Developers", 2013)

"Because we hate living with uncertainty, we often try to make complex systems, such as the economy, more predictable and less uncertain. However, making a complex system more predictable also makes it less resilient to shocks, and less creative. Lowering uncertainty reduces complexity, often with disastrous effects." (Edgar E Peters, "Patterns in the dark: understanding risk and financial crisis with complexity theory", 1999)

"Complex systems, then, have local uncertainty and global certainty. They generate change, and they are resilient to unexpected shocks. They turn uncertainty into order, and they reverse order back into uncertainty. They evolve and change through time, and they do so without a central planner. Complex systems are everywhere. In fact, real life is one huge complex system. How is such behavior possible? First, we need to understand the general class of complex systems. By understanding their nature, we will see the important role uncertainty plays in maintaining stability. When we understand natural systems, we will understand the role of uncertainty in a free society." (Edgar E Peters, "Patterns in the dark: understanding risk and financial crisis with complexity theory", 1999)

In a free-market economy, then, uncertainty is a necessary element. Only when the economy is in a state of uncertainty can the participants efficiently search for solutions to problems and find creative answers. In addition, only a system that depends on uncertainty can survive unexpected shocks. A complex process can take multiple paths to an optimal solution. It does not require 'ideal' conditions; in fact, shocks often force it to find a better solution, a higher hill in the fitness landscape. The 'creative destruction'identified by the Austrian school suggests that a free-market economy is not only resilient to shocks, but is also creative and capable of generating innovation. It can only do so while in a high state of uncertainty." (Edgar E Peters, "Patterns in the dark: understanding risk and financial crisis with complexity theory", 1999)

"It seems obvious that uncertainty reigns during times of crisis. However, crisis itself can be a positive development. It is only negative in that it specifies that change is coming. Most people are uncomfortable with change and equate it with hard times. Mainstream economics tends to take the same view, calling such events 'shocks'. They are even referred to as 'exogenous' - outside of the system. If it were not for change, according to the mainstream school, everything would continue along in perfect balance, a 'circular flow'. Change is like an alien invasion. The mainstream view ignores the fact that change is necessary." (Edgar E Peters, "Patterns in the dark: understanding risk and financial crisis with complexity theory", 1999)

"Uncertainty is not necessarily bad or synonymous with risk. Complex systems use uncertainty to their advantage as they adapt to changes in their environment and learn to be resilient to unexpected shocks. Uncertainty then, rather than being the source of so many problems, becomes a necessary element if a market and a society are to remain free." (Edgar E Peters, "Patterns in the dark: understanding risk and financial crisis with complexity theory", 1999)