Complexity (Photo credit: stuartpilbrow)

In the last years we have seen many changes in our lives, but what road should we choose for the future?

If we analyze the complexity of the world economy we will be able to see that it has been growing in the last decades. Globalization has produced a new world that is much more difficult to manage, mainly because there is not a global government. Multinational organizations are appearing in order to cope with this new situation as a road to control this new world but their capability to control effectively the new environment is smaller every day.

When we need to face a complexity increase, we have a main objective that is to improve the manageability of the system.

In the sixties the classic control theory was developed. This mathematical tool was useful to improve the controllability of physical systems. Through feedback we can change the dynamic evolution of a physical system in order that it can follow a reference signal. This scheme is simple; we can introduce a controlling device that forces the system to work near an equilibrium point. We are introducing a complex device into the system but the resultant effect provides a reduced number of possible (or at least more probable) states. In terms of complexity, although the maximum complexity can be higher, the measured one becomes lower.

Thus, it is easy to understand that there are two possible ways in order to solve a complexity problem, simplifying the dynamics of the system eliminating some parts of it, and increasing control introducing a controller device that will drive the system near an equilibrium point.

The classic control theory is based on the use of centralized controllers, in the next years, distributed control was introduced. The idea of distributed control is adding controllers to different parts of the system that can modify the dynamic response of every part producing a more manageable global effect.

In terms of complexity, the distributed control is more complex than the centralized one but the resultant system once the system has been properly tuned can provide a lower measured complexity.

Moving this reasoning towards economy, as there is not a global government, the control of the worldwide economy is been done through distributed control. Every government is tuning its own control mechanism but the dynamic response on every part and how the controller must be tuned depend on the working point of the other parts and how the control system is being tuned.

That is the reason because international agreements must be fulfilled, and the reason because some governments are asking for the fulfillment of the previous compromises.

Nowadays, governments must understand that they cannot control their own countries as they were managing the closed economy of a remote little village of the countryside, because their government decisions are affecting the dynamic behavior of an extremely linked international economy. Although many of them are trying to fencing the countryside, perhaps it is too late now.