Thank you @Stef-Kuypers for bringing up this very point. This is important, it appears, because in our research transactions within an (indigenous) group most often took the form of gifting & reciprocal societal obligations. This necessarily involves reputation, development of trustworthiness and the whole associated raft of personality attributions. The problem of “free riders” was simply dealt with through shaming or in extreme cases shunning, a form of expulsion from the group that often was an existential threat.
Monetary systems evolved, if memory serves, from barter. Barter was the form of transaction usual between “strangers”, often etymologically derivative from “enemies” & sometimes the very same word. In this case, it was always desirable to get a good deal, that is, “buy low, sell high”. It’s not hard to see how this worked out.
It would seem more ideal, in a SF world, to once again involve reputation (trustworthiness?) as an element in a value exchange. This would seem a requirement for a world where everyone is a member of the group & no one mentally projected across a border to the status of being “other”. This would undercut the basis for war, religion & ruthless expropriation & exploitation that led to today’s climate crisis. There are more issues here, as well, including a base psychological construct, but perhaps that strays too far from the point at hand.
For our 2 cents, we would certainly like to see the point you raised well considered for inclusion. Thanks again @Stef-Kuypers for bringing this point to our attention.
Hmm… no, I don’t think World3-type models are the way to go. I see computer models as sort of parables: they contain the bare minimum to make a point. Here we want to make the point that, if preferences are endogenous, material growth is entangled with the shift in preferences. This means imagining a world that makes two products (in Goodwin’s model there is effectively only one): call them “wheat” and “art”. “Wheat” satisfies all material needs, whereas “art” is what people do for fun. Assume “art” has no carbon footprint at all. Assume further that people get paid when they produce “wheat”, but not when they produce “art”.
Finally, assume that how much “wheat” people need to satisfy their material needs depends on something in the model. We might need to introduce yet another variable. If this need is constant, capital accumulation will produce a Keynesian world of high productivity of labor in producing “wheat”, and everybody will spend more and more of their time doing “art”. But if the need increases fast enough, you would get people “running to stand still”, producing more and more “wheat” instead of doing more “art”.
You get the idea: you make a toy world that does not describe the real world, but isolates the dynamic you care about. Not easy, but it is the work.
Ok, guys, let’s do this. I am calling the first-ever Sci-Fi Economics Lab seminar. It takes place on Zoom, on Monday, December 16th, at 17.00 CET. Program:
@mstn to present his work on the zero-growth Goodwin model. Marco, you can show slides or otherwise share your screen if you want.
I will then introduce a group discussion on modeling strategies. Ideas welcome. The main choice, as I see it now, is whether to stay with a classical-economics style macro model, or if to go agent-based, simulating micro behavior. In the first case the dynamics is modelled with differential equations (which is what Goodwin did); in the second case the dynamics is described in terms of the trajectory of the system’s state variables.
Ok! Here, the notebook. I have not found time to review it, but imo the main points are:
Some people say that economical growth must be slowed down to save the Planet. Others strongly disagree. We do not want to shed light on this debate because we are not experts (me at least).
We are interested in imaging what a zero growth capitalistic society looks like. We assume that, in a near future, governments are forced to implement zero growth policies because scientists and economists have discovered that economical growth is intrinsically unsustainable and a sudden worsening of the climate crisis is demanding severe countermeasures (otherwise human race could face extinction). We do not know if the unsustainability hypothesis is true in the real world, we assume that it is true (or believed to be true) in our fictional world. This setting reminds me of some Asimov’s novels.
We use the Goodwin model, which is “starkly schematised and hence quite unrealistic model of cycles in growth rates” (from here). However, it is interesting because it describes the economical machinery. Probably, it is not a formal description of mainstream economics, because it seems to be written by the specter of Karl Marx.
We do not use the model for accurate predictions, but to generate stories. I am thinking of The Castle of Crossed Destinies by Italo Calvino. Basically, he imagines to create interleaving stories from “random” combinations of playing cards. Less poetically, we use model parameters instead of cards.
What does the model say imo?
Zero growth is bad. Unemployment is one of its consequences. Nothing new here, I suppose.
In order to keep zero growth, Governments need to use their iron fist. First, they need to fight discontent (from unemployment), then they have to control the job market size and technology.
Capitalists do not like zero growth, as well. In normal conditions, the model seems to suggest that the ROI for companies goes down in time (probably, Goodwin here encoded the Marx’s falling rate of profit argument in his equations). But ROI peaks are smaller near zero growth. This means, if I am not wrong with my calculations, that business owners can hope in big future profits in both positive and negative markets, but, near (not exactly at) zero growth, they have to give up their hopes (better a crisis than zero growth). In this context they need to find profits elsewhere, e.g. commodification of everyday life, worsening working conditions and quality of products/services, the usual stuff. At the same time, they could lobby the government in order to relax the zero growth policies.
The scenario is basically the classical cyberpunk story with different possible flavors, depending if government is stronger than big companies or vice versa.
Next step is the validation of existing sci-fi novels using extensions of the model. E.g the Jackpot seems a good fit.
Hi, I thought it would be useful to add the picture describing the Goodwin model that I used during the call. Made with drawio. Description in plain English on the notebook coming soon.
This week I am taking some time to think around this model that @mstn sketched. My goal is to build it up into a pre-paper that uses some SF as a way to help the intuition.
The structure I imagine is this:
Introduction to the Goodwin model (already done in the notebook by Marco @mstn).
Discussion of the Goodwin model in a zero-growth steady state (already done by Marco). Note: I remembered that Paolo Bacigalupi’s The windup girl depicts a post-fossil fuel world where economic growth is propelled only by technical change. The relevant bit is that it contains a repression of any economic activity that might put further pressure on climate change, specifically sea levels (the novel is set in a Thailand where only Dutch-style water engineering keeps Bangkok from going underwater). Not sure if we can use it as a rendering for the steady state case.
Add a more broken down discussion of the formula for u_0 in the steady state. Specifically, I would like to discuss the idea that alpha + beta = 0 in the “Zero growth” part of the notebook, does not necessarily mean that alpha = beta = 0. You could have positive population growth beta and negative labor productivity alpha (a “Malthusian dark age”) or viceversa (a “high-tech” massive dieoff, like the Jackpot in William Gibson’s The peripheral).
Before I do that, however, we need to define more rigorously the idea of steady state.
In system dynamics (physics), a system is considered to be in steady state if the rate of growth is constant for all of its state variables. And this is still a minimal definition: the Wikipedia entry reads to me like it requires zero growth for all state variables.
In economics, the definition of steady state tends to focus on the “main” state variables, like output and the stock of capital. I have not been able to confirm that this implies that that the other ones (like, in the Goodwin model, the share of output appropriated by labor and the unemployment rate) are allowed to vary. Also there is a question of time scales: the Goodwin model produces fluctuations around a constant value. Is this “steady”, at least discrete-time steady?
Any thoughts, Marco? Or anyone? Any macro expertise we can mine here?
beta>0 and alpha<0 can represent a shortage of fossil fuels. Since our Economy is based on fossil fuels, if we run out of oil for any reason, then factories will stop for some time. Population could increase for immigration (a war in oil producing countries?).
Re steady state, it depends on what you consider as “state”. In Goodwin model u and v are the state variables, everything else can be derived from them. g_u (growth, rate of change in output) is not zero when du/dt=dv/dt = 0, but it is constant, so the rate of the rate of change in output is zero.
In general, being in steady state imo does not mean that the system is still. You can also have varying external input functions (in our case tech and population). Usually, a state is represented only by inner variables, but, of course, inputs are part of the description of a system.
Re fluctuations, I think that a fluctuating system can be considered in “equilibrium”, even if it is not in a mathematical steady state. After all, it is steadily replicating the same behavior over and over. Bifurcation diagrams, in some sense, are a tool that study “non-steady steady states”.
Rephrasing: given parameters, input functions and initial conditions, u and v are the smallest state describing the time-based dynamics of the system. Mathematicians are lazy, so they are interested only in u and v. Economically, however, q and k are important as well.
We could use state for the “minimal” state to be consistent with ODE terminology and see q and k as measurements/observations m: (S, t) → Real where S is the state space and t time.
EDIT
Also computationally, (u,v) is usually the state s(t) because in order to compute s(t+1), you need only the information (u,v). You could add dummy variables (u, v, number of cats on the Internet), but s(t+1) would have the same value.
Thank you @alberto & @Stef-Kuypers for this succinct & very well done video. We feel it would be lovely if more people would view this. A link to the YouTube video will soon be posted to our modest Twitter channel, wish we could do more to spread it around. It’s brilliant ideas like this we all could use more of.
I simplified the code. In this way it should be easier for everybody to add new plots to the main graph reusing code snippets.
Every ObservableHQ notebook is a sort of Javascript module/package. It is possible to import code (and UI elements!) from one notebook to another with import { getMultiLineGraph } from "@mstn/graphs". Notebooks can be used also as documentation for their own code.
Here, the basic function to create a simple multiline graph. I will add legends and other stuff at some point.
Here the old notebook (I “published” it so that it has a meaningful name and not a number). In order to create a new interactive/reactive graph, just do
draw((data) => {
// data is the output of a goodwin simulation, basically t (time) and y=[u,v] (state)
const {x: t, y: ys} = data;
// we create lines from raw data and add some attributes (e.g. line colors)
// the idea is that on a state (u,v) we make some observations/measurements
// which could be more meaningful for our analysis
// here we return a line for the profit rate
return [{
x: t,
y: ys.map( (y, i) => [getProfitRate(t[i], y[0], y[1])] ),
color: PROFIT_RATE_COLOR,
size: 1,
}];
}, options)
Of course, we can use different ODE models as well.
During the last chat with @alberto, I remembered a theory saying that The Black Death enabled the Italian Renaissance. Today I googled it and found this (bold mine): it is the Jackpot!
The social consequences of the plague on society came to be profound. The high mortality rate resulted in a drastic decline in the labor force. Wages rose for both agricultural and urban workers. The survivors of the Black Death generally had a higher standard of living than before the plague […] Because of the labor shortages, there was a move from labor-intensive farming such as cereal to livestock and increase both in industry and agriculture more labor-saving devices employed
In the South, dynamics were different:
After the Black Death, the elite responded to the labor shortages by strengthening the restrictions on the peasants and thereby strengthened feudalism in southern Italy.
Basically, here we have a decline of work force without technological breakthroughs. Perhaps we can deduce it from the Jackpot-Goodwin model. Apparently (but still not sure), when workforce falls and tech increases, the profit rate is smaller in the Jackpot-Goodwin model. The aristocracy (capital) might oppose to technological breakthroughs in this context. But… stay tuned!
