Fernando Alcoforado *
We live in a chaotic world that, despite attempts at economic and social...
the capital market, we can estimate the future price of these shares in the short term. An
estimate for the value of the...
For the above, make mistakes not just technocrats formulators of economic models that
do not work and also the politics ...
Upcoming SlideShare
Loading in …5

Chaos, planning and order


Published on

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Chaos, planning and order

  1. 1. 1 CHAOS, PLANNING AND ORDER Fernando Alcoforado * We live in a chaotic world that, despite attempts at economic and social planning in various capitalist and socialist countries, there has been no success in finding their ordering and economic and social stability. The Soviet Union inaugurated the centralized state planning effort that brought extraordinary economic growth for the country until the 1970s, but could not prevent its decline and disintegration in the late 1980s of the twentieth century. Some central and peripheral capitalist countries, like Brazil, have planned their economies based on the Keynesian model after World War II obtaining high economic growth that did not become sustained. With the demise of the Soviet Union and the socialist countries of Eastern Europe and the victory of neoliberal model throughout the world from the 1990s, government planning was abandoned throughout the capitalist world as a tool for promoting economic and social development. With the crisis of 2008, the state has adopted monetary and fiscal policies with the sole purpose of avoiding bankruptcy of the capitalist world system. Still prevails in the operation of the world capitalist system in several countries the thesis that the state should not intervene in economic planning economic and social development. Throughout history, the development of capitalism has always gone hand in hand with the economic and social chaos in all regions of the world. The economic history of several countries, including Brazil, demonstrates that while capitalism intervene at national borders with the adoption of policies of economic and social planning does not succeed in ordering their economies and their sustainable economic and social development, and less will enable the ordering of the world economy. In other words, no matter what you plan on each country's, economic and social chaos will prevail in its economy and also in the world economy. All that has just been reported demonstrates that the ancient belief in determinism, in the control and predictability of economic models do not hold in the contemporary era. The chaos and complexity of the business environment mean that governments, businesses and people feel a sense of being swept away by a tornado that permeates the political, economic and social life. This means that to understand and manage a complex social and economic system we must think and act in complex ways using concepts and practices, at least comparable to the complexity of this system. The classical sciences in the past, offered a series of methods to understand the reality and build economic and organizational models no longer meet the needs of the contemporary era. We live and work in a world that can no longer be considered based on the concepts of Newtonian mechanics, the rationalism of Descartes and the determinism of Laplace. We cannot continue with economic and organizational models in which everything related to them is treated in isolation and disconnected from the whole. Every country on the planet and the world we live in are made of chaotic political, economic and social systems, unpredictable and sensitive to initial conditions are characterized by the inability to predict its future stages because a small change in the initial conditions of the system can cause large implications on its future behavior. One can take as an example the market of the stock exchange. After the purchase of shares in
  2. 2. 2 the capital market, we can estimate the future price of these shares in the short term. An estimate for the value of these shares however, as time passes, ie, long-term yields, very probably wrong. It can be stated that each country and the world operate according to Chaos Theory that is one of the most important laws of this Universe in essence almost everything around us. The central idea of Chaos Theory is that a tiny change in the beginning of an event can bring any huge consequences and absolutely unknown in the future. Therefore, such events would be virtually unpredictable - chaotic, so. The air of unpredictability gained serious scientific study in the early 1960s, when the American meteorologist Edward Lorenz discovered that apparently simple phenomena are behaving as chaotic as life. Edward Lorenz came to this conclusion when testing a computer program that simulated the movement of air masses. One day, Lorenz spoke a number of calculations that fed the machine with some less decimal places, hoping that the results changed little. But the insignificant change completely transformed the pattern of air masses. Over time, scientists concluded that it appeared unpredictability in almost everything, the rhythm of heartbeats to quotations from the Stock Exchange. In the 1970s, the Polish mathematician Benoit Mandelbrot gave a new impetus to the theory by noting that the Lorenz equations corresponded with what he himself had done when he developed the fractal figures generated from mathematical formulas that depict the geometry of nature, as relief ground or ramifications of our veins and arteries. A joint experiment of the Lorenz with Mandelbrot math indicates that chaos seems to be the essence of everything, shaping the universe. Recent research showed something even more surprising: the same equations appear in chaotic phenomena that have nothing to do with each other. The Lorenz equations for the chaos of air masses also arise in experiments with laser beam, and the same formulas governing certain chemical solutions are repeated when studying disordered rhythm of drops from a faucet. Prigogine developed the theory of dissipative structures that are those far from equilibrium. In some stages, system elements behave in a deterministic way and other phases - near bifurcations - works not deterministic manner (See Article Order Order Out of Chaos of Ilya Prigogine & Isabelle Stengers published on the website <http://www.mountainman.com.au/chaos_02.htm>). Economic models of deterministic simulation widely used today do not respond to the challenges of the contemporary era as it has no random variables. In this model, for a known input data set will have a single set of output results. You need to consider the use of probabilistic, stochastic models that have one or more random variables as input, which lead to random outputs too. In the twentieth century, scientific determinism created by the Classical Science is in crisis. The Theory of Relativity and Quantum Mechanics rejected Mechanics of Newton and the rationalism of Descartes. From the 1960s, new scientific discoveries such as Chaos Theory, which eliminated the Laplacian fantasy of deterministic predictability, and Complexity Theory, which eliminated the idea that the world is simple and can be studied by isolated disciplines, demonstrated that the world is a multi-and transdisciplinary phenomenon. Sciences, from the mid-twentieth century, began to deal with what is real in the world, that is, considering complex and unpredictable most of the phenomena that take place in it. Therefore, human systems as business, economies and societies must be considered as complex systems.
  3. 3. 3 For the above, make mistakes not just technocrats formulators of economic models that do not work and also the politics that envisions transforming society without taking into account the nature of economic and social system. The nature of the economic and social system is not subject to any proactive political or economic project. Attempts to force the economy with goals that contradict the economic logic does not have the long- term stability. This is evidenced in the economic failure to industrialize some peripheral regions, as a failure of real socialism, which had to recognize their own economic irrationality. * 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.