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How to manage chaos in the dynamics of capitalist system

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  • 1. 1 HOW TO MANAGE CHAOS IN THE DYNAMICS OF CAPITALIST SYSTEM Fernando Alcoforado * Capitalism is the social system based on division of labor and private property of the means of production. All economic agents act on their own. This system is driven by the market that guides the activities of economic agents in ways that enable better serve ‘investors' expectations. The State uses its coercive power solely for the purpose of preventing people undertake detrimental to the preservation and proper functioning of the market economy. Thus the State creates and preserves the environment in which the market economy can function safely. The Marxist slogan that characterizes the capitalist system as anarchic correctly depicts this social structure. In the market economy, the majority of economic output (goods and services) is following the decision by private companies controlled by private citizens in industry, commerce, infrastructure and service delivery. In the market economy, the state interferes in economic activity primarily to regulate and in some countries, provide services in sectors such as energy, security, education, health, among others. The state planning of the economy is only indicative. The desired performance standard of a nation is measured in a market economy, basically by its performs in the economy using as benchmarks of progress the size and growth of GDP (Gross Domestic Product) and inflation rate. Capitalism is a complex, dynamic, adaptive and nonlinear system because it has elements or agents that interact in large numbers together forming one or more structures that arise from interactions between such agents. Complex systems are systems that are characterized by being dynamic as key features that have their sensitive dependence on initial conditions for which, minimal differences at the beginning of a process whatsoever, can lead to completely opposite situations over time. The opinion of Ervin Laszlo, Ph.D. from the Sorbonne and president of the Club of Budapest, presented in the book O Ponto do Caos (The Point of Chaos) (São Paulo: Editora Cultrix, 200), is that "a dynamic system, whether occurring in nature, in society or in a computer simulation, is governed by attractors. These define the 'phase portrait' of the system: how it behaves over time. Stable attractors pull the trajectory of system development into a recurring and recognizable pattern, taking it to converge at a given point (if the system is governed by point attractors) or describe cycles through different states (when it is under command of periodic attractors). However, dynamical systems can also achieve a state in which the attractors that emerge are not stable, but 'strange'. Are chaotic attractors". It should be noted that an attractor is the set of points in phase space to which a system tends to go as it evolves. The attractor can be a single point, a closed curve (threshold cycle) which describes a system of periodic behavior, or a fractal (also called strange attractor), when the system presents chaos. In chaotic systems the motion never repeats itself, though often having to occur within certain limits. Thus, only an infinitely complex figure - a fractal - can handle represent this trajectory never repeats itself in phase space. Change and time are the two fundamental aspects of Chaos. Chaos mainly refers to something that evolves over time. Chaos theory explains the operation of complex and dynamic systems. In such systems, many elements are interacting in unpredictable and random. This is the case of the capitalist market
  • 2. 2 economy because there is no effective governance of the economic system. Note that, Ilya Prigogine, commenting on “As leis do Caos” (Laws of Chaos) about bifurcation points in chemical reactions, states that "they demonstrate that even in our macroscopic level prediction of the future mix determinism and probability. At the bifurcation point, the prediction is probabilistic, whereas among the bifurcation points, we can speak of deterministic laws" [PRIGOGINE, I. As leis do caos (The laws of chaos). São Paulo: Editora da UNESP, 2002]. It´s the thesis of Ervin Laszlo that "the systems go into a state of chaos when fluctuations that were until then corrected by negative feedbacks self-stabilizing get out of control. The development trajectory becomes nonlinear: prevailing trends collapse and in its place various complex developments arise. Rarely chaos is a prolonged condition; in most cases is only a transitional period between more stable states. When the fluctuations in the system reach levels of irreversibility, the system reaches a critical point where it collapses into its individual components stables (collapse) or undergoes a rapid evolution toward a resistant state fluctuation that destabilized (breakthrough). If this path of breakthrough is selected, the system evolves to a state in which it has a processing capacity of intensified information and more efficient use of free energy as well as more flexibility, greater structural complexity and additional levels of organization". When is subject to "fluctuations", a dynamic system such as economic system of a country leads to a bifurcation point from which the system reaches a new dynamic stability (breakthrough) or collapses. At the bifurcation point, the system has to be restructured or collapse. This is the situation faced by many countries, including Brazil, which, after the crisis that erupted in 2008 in the United States and spilled over the planet, there wasn´t a restructuring of the national economy and global economic systems. The path of breakthrough that would lead to overcoming the global economic crisis that erupted in 2008 and was not resolved until today, require the restructuring of the world economic system by turning it into an open complex system, self-organizing and sensitive feedback that, contributing for the exchange of input or energy with the environment, become the system susceptible to changes resulting from feedback, adapting to the new environment and learning through experience. Instead of breakthrough that would lead to overcoming the global economic crisis, the scenario of the global economic collapse was predicted by the great thinker and French economist Jacques Attali who predicts the occurrence of four steps to the unfolding economic crisis that erupted in 2008 in United States and that spilled over the world: 1) the public debts become heavier; 2) the failure of the euro and the global depression; 3) the failure of the Dollar and the return of global inflation; and, 4) the depression and ruin of Asia (ATTALI, J. Tous dans dix ans Ruines - Dette publique: La dernière chance. Artheme Librairie Fayard, 2010). Currently, the world economy is facing step 1 in which public debt swelled worldwide. According to Jacques Attali, the international financial system no longer works. The neoliberal model that ruled the world in the last 40 years died and there will be depression that will last many years. Given the existence of chaos that dominates the world economy, it is time for each country and humanity equip themselves as urgently as possible the tools necessary to take control of your destiny. To have control of your destiny mankind must exercise their governance of the economic systems and of the world economy. This is the only means of survival of the human species.
  • 3. 3 * Fernando Alcoforado , member of the Bahia Academy of Education, engineer and doctor of Territorial Planning and Regional Development from the University of Barcelona, a university professor and consultant in strategic planning, business planning, regional planning and planning of energy systems, is the author of Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de Barcelona, http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social Development-The Case of the State of Bahia (VDM Verlag Dr. Muller Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (P&A Gráfica e Editora, Salvador, 2010), Amazônia Sustentável- Para o progresso do Brasil e combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011) and Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), among others.