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Old 30th Oct 2014, 21:52
  #1486 (permalink)  
Sunfish
 
Join Date: Aug 2004
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Complexity And Negative Returns

I believe an adequate description to Australias aviation regulation predicament can be found in the work of Joseph Tainter, a social theorist working in the field of complex societies.

His theory involves the concept of diminishing returns - where successive investments produce less and less return, finally reaching the point of zero return where the benefit matches the capital cost of providing it, before finally producing negative returns,, where each successive investment costs more than it benefits.

If we apply this to regulation, there are obvious parallels; we decide to drive on the left side of the road and car crashes diminish, a simple law produces a major benefit. We introduce speed limits and right of way rules, ditto. However as each layer of investment is added the compliance costs increase and the benefits decrease.

We now reach the point, for example, of requiring random drug and alcohol testing of the entire pilot, Air traffic controller and LAME populations, complete with mandatory management plans at a cost of many, many millions to the industry for what return? How many participants have been detected? Two? Six? This is a clear case of an investment providing a totally negative return.

Another case is the massive investment in time and money by CASA in a crusade against pilots with colour vision defects. FOr what benefit? Improving safety? There hasn't been any incident let alone accident involving a colour vision defect in 25 years! Exactly why are we making this investment?

As the extract below puts it, complex societies and organisations got that way be regulation and organisation, and the automatic response to a perceived problem is more of the same - more regulation.

The massive tomes of regulation being emitted by CASA are thus explained. Their solution to everything is more regulation, even if the point of diminishing returns is long past and we are far into negative return territory.

More examples anyone??



When a society begins to add layers of social complexity—for example, expanding the reach of the division of labor, setting up hierarchies to centralize decisionmaking, and so on—the initial rounds pay off substantially in terms of additional wealth and the capacity to deal with challenges from other societies and the natural world. Here again, though, there’s a point of diminishing returns, after which additional investments in social complexity yield less and less in the way of benefits, and there’s a point of zero marginal return, after which each additional increment of complexity subtracts from the wealth and resilience of the society.

There’s a mordant irony to what happens next. Societies in crisis reliably respond by doing what they know how to do. In the case of complex societies, what they know how to amounts to adding on new layers of complexity—after all, that’s what’s worked in the past. I mentioned at the beginning of this month, in an earlier post in this sequence, the way this plays out in political terms. The same thing happens in every other sphere of collective life—economic, cultural, intellectual, and so on down the list. If too much complexity is at the root of the problems besetting a society, though, what happens when its leaders keep adding even more complexity to solve those problems?
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