Ecological Thinking in the Wild

As I've written about before, the idea behind ecological thinking is that complex systems have niches, and it’s often more productive to think about behavior as a property of the niche rather than the actors who inhabit the niche.

Let's look at some examples of this kind of thinking, taken from the internet at large.

1. How can a school effectively reform elementary school bullies?

On Quora, the indefatigable Yishan proposes an ecological solution to this problem: punish the bully's peers.

One major determining factor about whether bullying is repeated is the reaction of the bully's peers. Often bullies are validated by friends or peers for identifying a victim and leading the bullying. Therefore, authority figures would be well-advised to set up a countervailing social dynamic that discourages bullying through social pressure.

In ecological terms: the niche for bullying exists because the bully gets recognition and reward from his peer group. Turn the peers against the bully and the niche will dry up, along with its corresponding behavior.

Like Yishan says at the end of his answer, "I don't know if this would work, but it'd sure be interesting to try."

2. Why is there so little originality coming out of Hollywood?

Again on Quora, Sean Hood gives us an ecological answer: "Hollywood makes more of what audiences pay to see. When more people start showing up for original movies, more originality will come out of Hollywood."

In other words, the audiences define the niche, and behavior (of the studios) is determined by the niche. This inversion of blame — from producers to consumers — can be seen in politics (why do politicians lie?), internet culture (why is content so inane?), and all forms of pop culture. The producers are only giving the people what they want.

Steve Jobs makes a similar observation about TV networks:

When you’re young, you look at television and think, There’s a conspiracy. The networks have conspired to dumb us down. But when you get a little older, you realize that’s not true. The networks are in business to give people exactly what they want. That’s a far more depressing thought. Conspiracy is optimistic! You can shoot the bastards! We can have a revolution! But the networks are really in business to give people what they want. It’s the truth.

3. Why are economic booms and busts so frequent, and so unpredictable? Why haven't we learned to control or avoid them?

This one is a gem, and might be what got me thinking in ecological terms to begin with. In a blog post from 2010, Eric Falkenstein shows how booms and busts are inevitable in the financial ecosystem. I'll do my best to excerpt it here (elided liberally), but you should really go read the whole thing. It will change the way you understand economic bubbles:

My argument is that business cycles are best understood though the framework of Batesian mimicry.

In ecosystems, Batesian mimicry is typified by a situation where a harmless species (the mimic) evolves to imitate the warning signals of a harmful species (the model) directed at a common predator (the dupe). For example, venomous coral snakes have red, yellow, and black bands, while the non-venomous scarlet king snake has the same colors in a different order. Animals afraid of venomous snakes would do well to avoid 4 foot long snakes with red, yellow and black stripes, in the process avoiding the scarlet king snake.

By parasitizing the true warning signal of the protected species, the Batesian mimic gains the same advantage without having to go to the biological expense of maintaining a poison.

It is not a stable equilibrium to have no mimics over long periods of time. [KS: In other words, there will always be cheaters because there is always a niche for cheating.]

In an expansion investors are constantly looking for better places to invest their capital, while entrepreneurs are always overconfident, hoping to get capital to fund their restless ambition. Sometimes, the investors (dupes) think a certain set of key characteristics are sufficient statistics of a quality investment because historically they were. Mimic entrepreneurs seize upon these key characteristics that will allow them to garner funds from the duped investors.

Once the number of mimics is sufficiently high, their valueless enterprises become too conspicuous and they no longer pass off as legitimate investments. Failures caused by insufficient cash create a tipping point, notifying investors that some of their material assumptions were vastly incorrect. Areas that for decades were very productive, are found to contain exceptional levels of fraud, or operate with no conceivable expectation of a profit.

Efforts to prevent the next recession face a large difficulty, in that the impetus by necessity will be in the area that invites the least concern, because that is where mimics fester. Any risk analysis that can identify risky ventures necessarily identifies safe ones, and when these safe investment characteristics become known to the mimics, they will be exploited.

Originally published June 4, 2012.