Thinking in Systems: A Primer

by Donella H. Meadows

Suppose you are for some reason lifted out of your accustomed place in society and put in the place of someone whose behavior you have never understood. Having been a staunch critic of government, you suddenly become part of government. Or having been a laborer in opposition to management, you become management (or vice versa). Perhaps having been an environmental critic of big business, you find yourself making environmental decisions for big business. Would that such transitions could happen much more often, in all directions, to broaden everyone’s horizons! In your new position, you experience the information flows, the incentives and disincentives, the goals and discrepancies, the pressures—the bounded rationality—that goes with that position. It’s possible that you retain your memory of how things look from another angle, and that you burst forth with innovations that transform the system, but it’s distinctly unlikely. If you become a manager, you probably will stop seeing labor as a deserving partner in production, and start seeing it as a cost to be minimized. If you become a financier, you probably will overinvest during booms and underinvest during busts, along with all the other financiers. If you become very poor, you will see the short-term rationality, the hope, the opportunity, the necessity of having many children. If you are now a fisherman with a mortgage on your boat, a family to support, and imperfect knowledge of the state of the fish population, you wi...

Great. I think the prison experiment was exposed as a fraud recently. Couldn't have known.

easily behavior changes can come, with even slight enlargement

The bounded rationality of each actor in a system—determined by the information, incentives, disincentives, goals, stresses, and constraints impinging on that actor—may or may not lead to decisions that further the welfare of the system as a whole.

Rational elites . . . know everything there is to know about their self-contained technical or scientific worlds, but lack a broader perspective. They range from Marxist cadres to Jesuits, from Harvard MBAs to army staff officers. . . . They have a common underlying concern: how to get their particular system to function. Meanwhile . . . civilization becomes increasingly directionless and incomprehensible. —John Ralston Saul,1 political scientist

But some systems are more than surprising. They are perverse. These are the systems that are structured in ways that produce truly problematic behavior; they cause us great trouble. There are many forms of systems trouble, some of them unique, but many strikingly common. We call the system structures that produce such common patterns of problematic behavior archetypes. Some of the behaviors these archetypes manifest are addiction, drift to low performance, and escalation. These are so prevalent I had no problem finding in just one week of the International Herald Tribune enough examples to illustrate each of the archetypes described in this chapter.

In a policy-resistant system with actors pulling in different directions, everyone has to put great effort into keeping the system where no one wants it to be. If any single actor lets up, the others will drag the system closer to their goals, and farther from the goal of the one who let go. In fact, this system structure can operate in a ratchet mode: Intensification of anyone’s effort leads to intensification of everyone else’s. It’s hard to reduce intensification. It takes a lot of mutual trust to say, OK, why don’t we all just back off for a while?

THE TRAP: POLICY RESISTANCE When various actors try to pull a system stock toward various goals, the result can be policy resistance. Any new policy, especially if it’s effective, just pulls the stock farther from the goals of other actors and produces additional resistance, with a result that no one likes, but that everyone expends considerable effort in maintaining. THE WAY OUT Let go. Bring in all the actors and use the energy formerly expended on resistance to seek out mutually satisfactory ways for all goals to be realized—or redefinitions of larger and more important goals that everyone can pull toward together.

The tragedy of the commons arises from missing (or too long delayed) feedback from the resource to the growth of the users of that resource.

If you think that the reasoning of an exploiter of the commons is hard to understand, ask yourself how willing you are to carpool in order to reduce air pollution, or to clean up after yourself whenever you make a mess. The structure of a commons system makes selfish behavior much more convenient and profitable than behavior that is responsible to the whole community and to the future.

THE TRAP: TRAGEDY OF THE COMMONS When there is a commonly shared resource, every user benefits directly from its use, but shares the costs of its abuse with everyone else. Therefore, there is very weak feedback from the condition of the resource to the decisions of the resource users. The consequence is overuse of the resource, eroding it until it becomes unavailable to anyone. THE WAY OUT Educate and exhort the users, so they understand the consequences of abusing the resource. And also restore or strengthen the missing feedback link, either by privatizing the resource so each user feels the direct consequences of its abuse or (since many resources cannot be privatized) by regulating the access of all users to the resource.

Some systems not only resist policy and stay in a normal bad state, they keep getting worse. One name for this archetype is “drift to low performance.” Examples include falling market share in a business, eroding quality of service at a hospital, continuously dirtier rivers or air, increased fat in spite of periodic diets, the state of America’s public schools—or my onetime jogging program, which somehow just faded away.

And to complete this tragic archetype, the desired state of the system is influenced by the perceived state. Standards aren’t absolute.

The balancing feedback loop that should keep the system state at an acceptable level is overwhelmed by a reinforcing feedback loop heading downhill. The lower the perceived system state, the lower the desired state. The lower the desired state, the less discrepancy, and the less corrective action is taken. The less corrective action, the lower the system state.

Another name for this system trap is “eroding goals.”

THE TRAP: DRIFT TO LOW PERFORMANCE Allowing performance standards to be influenced by past performance, especially if there is a negative bias in perceiving past performance, sets up a reinforcing feedback loop of eroding goals that sets a system drifting toward low performance. THE WAY OUT Keep performance standards absolute. Even better, let standards be enhanced by the best actual performances instead of being discouraged by the worst. Use the same structure to set up a drift toward high performance!

“I’ll raise you one” is the decision rule that leads to escalation. Escalation comes from a reinforcing loop set up by competing actors trying to get ahead of each other.

Escalation, being a reinforcing feedback loop, builds exponentially. Therefore, it can carry a competition to extremes faster than anyone would believe possible. If nothing is done to break the loop, the process usually ends with one or both of the competitors breaking down.

THE TRAP: ESCALATION When the state of one stock is determined by trying to surpass the state of another stock—and vice versa—then there is a reinforcing feedback loop carrying the system into an arms race, a wealth race, a smear campaign, escalating loudness, escalating violence. The escalation is exponential and can lead to extremes surprisingly quickly. If nothing is done, the spiral will be stopped by someone’s collapse—because exponential growth cannot go on forever. THE WAY OUT The best way out of this trap is to avoid getting in it. If caught in an escalating system, one can refuse to compete (unilaterally disarm), thereby interrupting the reinforcing loop. Or one can negotiate a new system with balancing loops to control the escalation.

Success to the successful is a well-known concept in the field of ecology, where it is called “the competitive exclusion principle.” This principle says that two different species cannot live in exactly the same ecological niche, competing for exactly the same resources.

Species and companies sometimes escape competitive exclusion by diversifying. A species can learn or evolve to exploit new resources. A company can create a new product or service that does not directly compete with existing ones. Markets tend toward monopoly and ecological niches toward monotony, but they also create offshoots of diversity, new markets, new species, which in the course of time may attract competitors, which then begin to move the system toward competitive exclusion again.

THE TRAP: SUCCESS TO THE SUCCESSFUL If the winners of a competition are systematically rewarded with the means to win again, a reinforcing feedback loop is created by which, if it is allowed to proceed uninhibited, the winners eventually take all, while the losers are eliminated. THE WAY OUT Diversification, which allows those who are losing the competition to get out of that game and start another one; strict limitation on the fraction of the pie any one winner may win (antitrust laws); policies that level the playing field, removing some of the advantage of the strongest players or increasing the advantage of the weakest; policies that devise rewards for success that do not bias the next round of competition.

This option, helping the system to help itself, can be much cheaper and easier than taking over and running the system—something liberal politicians don’t seem to understand. The secret is to begin not with a heroic takeover, but with a series of questions.

THE TRAP: SHIFTING THE BURDEN TO THE INTERVENOR Shifting the burden, dependence, and addiction arise when a solution to a systemic problem reduces (or disguises) the symptoms, but does nothing to solve the underlying problem. Whether it is a substance that dulls one’s perception or a policy that hides the underlying trouble, the drug of choice interferes with the actions that could solve the real problem. If the intervention designed to correct the problem causes the self-maintaining capacity of the original system to atrophy or erode, then a destructive reinforcing feedback loop is set in motion. The system deteriorates; more and more of the solution is then required. The system will become more and more dependent on the intervention and less and less able to maintain its own desired state. THE WAY OUT Again, the best way out of this trap is to avoid getting in. Beware of symptom-relieving or signal-denying policies or practices that don’t really address the problem. Take the focus off short-term relief and put it on long term restructuring.

THE TRAP: RULE BEATING Rules to govern a system can lead to rule beating—perverse behavior that gives the appearance of obeying the rules or achieving the goals, but that actually distorts the system. THE WAY OUT Design, or redesign, rules to release creativity not in the direction of beating the rules, but in the direction of achieving the purpose of the rules.

Counterintuitive—that’s Forrester’s word to describe complex systems. Leverage points frequently are not intuitive. Or if they are, we too often use them backward, systematically worsening whatever problems we are trying to solve.

The amount of land we set aside for conservation each year. The minimum wage. How much we spend on AIDS research or Stealth bombers. The service charge the bank extracts from your account. All of these are parameters, adjustments to faucets. So, by the way, is firing people and getting new ones, including politicians. Putting different hands on the faucets may change the rate at which the faucets turn, but if they’re the same old faucets, plumbed into the same old system, turned according to the same old information and goals and rules, the system behavior isn’t going to change much. Electing Bill Clinton was definitely different from electing the elder George Bush, but not all that different, given that every president is plugged into the same political system.

It’s not that parameters aren’t important—they can be, especially in the short term and to the individual who’s standing directly in the flow. People care deeply about such variables as taxes and the minimum wage, and so fight fierce battles over them. But changing these variables rarely changes the behavior of the national economy system. If the system is chronically stagnant, parameter changes rarely kick-start it. If it’s wildly variable, they usually don’t stabilize it. If it’s growing out of control, they don’t slow it down.

You hear about catastrophic river floods much more often than catastrophic lake floods, because stocks that are big, relative to their flows, are more stable than small ones. In chemistry and other fields, a big, stabilizing stock is known as a buffer.

You can often stabilize a system by increasing the capacity of a buffer.5 But if a buffer is too big, the system gets inflexible. It reacts too slowly. And big buffers of some sorts, such as water reservoirs or inventories, cost a lot to build or maintain.

A system just can’t respond to short-term changes when it has long term delays. That’s why a massive central-planning system, such as the Soviet Union or General Motors, necessarily functions poorly.

A delay in a feedback process is critical relative to rates of change in the stocks that the feedback loop is trying to control. Delays that are too short cause overreaction, “chasing your tail,” oscillations amplified by the jumpiness of the response. Delays that are too long cause damped, sustained, or exploding oscillations, depending on how much too long. Overlong delays in a system with a threshold, a danger point, a range past which irreversible damage can occur, cause overshoot and collapse. I would list delay length as a high leverage point, except for the fact that delays are not often easily changeable. Things take as long as they take.

Any balancing feedback loop needs a goal (the thermostat setting), a monitoring and signaling device to detect deviation from the goal (the thermostat), and a response mechanism (the furnace and/or air conditioner, fans, pumps, pipes, fuel, etc.).

One of the big mistakes we make is to strip away these “emergency” response mechanisms because they aren’t often used and they appear to be costly. In the short term, we see no effect from doing this. In the long term, we drastically narrow the range of conditions over which the system can survive. One of the most heartbreaking ways we do this is in encroaching on the habitats of endangered species. Another is in encroaching on our own time for personal rest, recreation, socialization, and meditation.

Reinforcing feedback loops are sources of growth, explosion, erosion, and collapse in systems. A system with an unchecked reinforcing loop ultimately will destroy itself.

Reducing the gain around a reinforcing loop—slowing the growth—is usually a more powerful leverage point in systems than strengthening balancing loops, and far more preferable than letting the reinforcing loop run.

Look for leverage points around birth rates, interest rates, erosion rates, “success to the successful” loops, any place where the more you have of something, the more you have the possibility of having more.

Missing information flows is one of the most common causes of system malfunction. Adding or restoring information can be a powerful intervention, usually much easier and cheaper than rebuilding physical infrastructure.

To demonstrate the power of rules, I like to ask my students to imagine different ones for a college. Suppose the students graded the teachers, or each other. Suppose there were no degrees: You come to college when you want to learn something, and you leave when you’ve learned it. Suppose tenure were awarded to professors according to their ability to solve real world problems, rather than to publish academic papers. Suppose a class got graded as a group, instead of as individuals.

Interesting ideas...

The ability to self-organize is the strongest form of system resilience. A system that can evolve can survive almost any change, by changing itself. The human immune system has the power to develop new responses to some kinds of insults it has never before encountered. The human brain can take in new information and pop out completely new thoughts. The power of self-organization seems so wondrous that we tend to regard it as mysterious, miraculous, heaven sent. Economists often model technology as magic—coming from nowhere, costing nothing, increasing the productivity of an economy by some steady percent each year. For centuries people have regarded the spectacular variety of nature with the same awe.

Self-organization is basically a matter of an evolutionary raw material—a highly variable stock of information from which to select possible patterns—and a means for experimentation, for selecting and testing new patterns.

Insistence on a single culture shuts down learning and cuts back resilience. Any system, biological, economic, or social, that gets so encrusted that it cannot self-evolve, a system that systematically scorns experimentation and wipes out the raw material of innovation, is doomed over the long term on this highly variable planet. The intervention point here is obvious, but unpopular. Encouraging variability and experimentation and diversity means “losing control.” Let a thousand flowers bloom and anything could happen! Who wants that? Let’s play it safe and push this lever in the wrong direction by wiping out biological, cultural, social, and market diversity!

the diversity-destroying consequence of the push for control demonstrates why the goal of a system is a leverage point superior to the self-organizing ability of a system. If the goal is to bring more and more of the world under the control of one particular central planning system (the empire of Genghis Khan, the Church, the People’s Republic of China, Wal-Mart, Disney), then everything further down the list, physical stocks and flows, feedback loops, information flows, even self-organizing behavior, will be twisted to conform to that goal. That’s why I can’t get into arguments about whether genetic engineering is a “good” or a “bad” thing. Like all technologies, it depends on who is wielding it, with what goal. The only thing one can say is that if corporations wield it for the purpose of generating marketable products, that is a very different goal, a very different selection mechanism, a very different direction for evolution than anything the planet has seen so far.

I said a while back that changing the players in the system is a low-level intervention, as long as the players fit into the same old system. The exception to that rule is at the top, where a single player can have the power to change the system’s goal.

Paradigms are the sources of systems. From them, from shared social agreements about the nature of reality, come system goals and information flows, feedbacks, stocks, flows, and everything else about systems.

You could say paradigms are harder to change than anything else about a system, and therefore this item should be lowest on the list, not second to- highest. But there’s nothing physical or expensive or even slow in the process of paradigm change. In a single individual it can happen in a millisecond. All it takes is a click in the mind, a falling of scales from the eyes, a new way of seeing. Whole societies are another matter—they resist challenges to their paradigms harder than they resist anything else.

People who cling to paradigms (which means just about all of us) take one look at the spacious possibility that everything they think is guaranteed to be nonsense and pedal rapidly in the opposite direction. Surely there is no power, no control, no understanding, not even a reason for being, much less acting, embodied in the notion that there is no certainty in any worldview. But, in fact, everyone who has managed to entertain that idea, for a moment or for a lifetime, has found it to be the basis for radical empowerment. If no paradigm is right, you can choose whatever one will help to achieve your purpose. If you have no idea where to get a purpose, you can listen to the universe. It is in this space of mastery over paradigms that people throw off addictions, live in constant joy, bring down empires, get locked up or burned at the stake or crucified or shot, and have impacts that last for millennia.

The higher the leverage point, the more the system will resist changing it—

Self-organizing, nonlinear, feedback systems are inherently unpredictable. They are not controllable. They are understandable only in the most general way. The goal of foreseeing the future exactly and preparing for it perfectly is unrealizable. The idea of making a complex system do just what you want it to do can be achieved only temporarily, at best. We can never fully understand our world, not in the way our reductionist science has led us to expect. Our science itself, from quantum theory to the mathematics of chaos, leads us into irreducible uncertainty. For any objective other than the most trivial, we can’t optimize; we don’t even know what to optimize. We can’t keep track of everything. We can’t find a proper, sustainable relationship to nature, each other, or the institutions we create, if we try to do it from the role of omniscient conqueror.

starting with history discourages the common and distracting tendency we all have to define a problem not by the system’s actual behavior, but by the lack of our favorite solution.

Get your model out there where it can be viewed. Invite others to challenge your assumptions and add their own. Instead of becoming a champion for one possible explanation or hypothesis or model, collect as many as possible. Consider all of them to be plausible until you find some evidence that causes you to rule one out. That way you will be emotionally able to see the evidence that rules out an assumption that may become entangled with your own identity.