Thinking in Systems
Donella Meadows built an exquisite analytical toolkit, then told us exactly where its utility ends. The future can only be envisioned, not analyzed.
Systems thinking makes clear even to the most committed technocrat that getting along in this world of complex systems requires more than technocracy.
— Donella Meadows, Thinking in Systems
Summer reading continues!
In last week's Letter, we read the trio of founding texts that inform the substance of circularity: Biomimicry, Cradle to Cradle, and the Performance Economy. This week we pick up the book that gave us its mindset.
Thinking in Systems by Donella Meadows provides a shared vocabulary for everyone interested in circularity: stocks, flows, feedback loops, leverage points.
Donella Meadows
I finished it this week and found something new. The book ends, compellingly, with the message that the toolkit is necessary, but not sufficient, for making change.
A toolkit that works
Meadows diagrams capital stock as two loops in tension. Investment feeds the stock and compounds — a reinforcing loop. Depreciation drains it — a balancing loop. Whichever loop dominates decides whether the system climbs exponentially (and crashes when resources run out) or reaches equilibrium.
Obsolescence is a peer to depreciation. You raise a stock by slowing its outflow as surely as by speeding its inflow.
That statement is Stahel's "era of R" in systems vocabulary. Service-life extension is outflow reduction. Repair, remanufacture, upgrade — every one of them slows the discharge.
Now consider our status quo. Planned obsolescence speeds the outflow on purpose. Accelerated depreciation does the same thing on the balance sheet. Two faces of one coin, both shortening the working life of the stock.
Meadows describes the balancing loops of a house, a furnace, and a thermostat. The furnace runs according to the weather outside. Make it artificially colder and the furnace runs harder. The harder it runs, the earlier it meets its "breakdown point."
That describes the linear economy's relationship with everything it builds. We manufacture a hostile climate for our own capital stock and act puzzled when nothing lasts. Premature breakdown points proliferate.
As Dark Helmet exclaims in Spaceballs: "...even in the future, nothing works!"
Meadows strikes a subversive note. She ranks the interest rate among humanity's worst ideas, because it biases financial analysis against the long view. Manufactured dependence does the same thing.
System understanding does not confer control
Her concluding message in the book is a confession of sorts, about her own failures to influence systems under her direct control.
She (and her colleagues) lectured on the structure of addiction and could not quit coffee. They mapped the trap of eroding goals and watched their own routines erode. They taught the dynamics of escalation, then built escalation into their marriages.
The substance underneath that revelation is pertinent to all who would apply system analysis to the real world. Self-organizing, nonlinear, feedback systems are unpredictable. They cannot be controlled. Any objective worth pursuing is complex enough to defy predictive analysis. We cannot optimize because we don't know what variable to optimize, or even which direction to move it.
Then she takes this observation to its logical endpoint. Understanding a system and managing one is a category difference. Analysis can only take you so far.
This is a rather important point that you seldom see in the literature of the circular economy.
Aristotle figured it out a while ago
Regular readers will know how much I have come to admire and depend on Roger Martin and his work. He has an essay I keep returning to, about epistemology and its application to strategy. Its memorable takeaway: "There is no data about the future — ever."
Martin cites Aristotle's two kinds of knowledge.
- Part of the world where things cannot be other than they are. Drop a ball and it falls. It will fall the same way tomorrow, so a sample from the past represents the future perfectly. Analysis works beautifully there.
- The rest of the world is where things can be other than expected, because it involves people, and people change. A survey about smartphone use in 1999 tells you nothing about what will happen in 2020, since in 1999 nobody knew what a smartphone was.
Martin's lament is that business education in its current state trains people to apply Aristotle's first method to the second world.
Look at Meadows through that lens and the two perspectives lock together. Her definition of a system — self-organizing, nonlinear, unpredictable — is Aristotle's second category. They mapped the same boundary from opposite directions. Martin found it through strategy. Meadows found it through ecosystems.
The road to the Circular Century runs through far side of that line. It offers opportunities for people to own different, buy different, want different. No amount of past consumer data will tell you how that is going to work out.
"The Circular Century offers opportunities for people to own different, buy different, want different."
Both of them prescribe imagination
Martin invokes Aristotle's remedy. Imagine the possibilities, then choose the one you can argue for most compellingly. After that, prototype: build a small version and turn the future into the past, so that at last you have data about it.
Meadows lands in a similar place. The future cannot be predicted. It can be envisioned, and brought into being with care. Her conclusion waxes lyrical:
Systems thinking... says that there is plenty to do, of a different sort of “doing.” The future can’t be predicted, but it can be envisioned and brought lovingly into being.
I think she uses that word "lovingly" with a rigorous intention.
Which raises a stubborn objection. So let's talk about it.
Imagination without discipline is daydreaming. What separates the two is judgment, theory, and the scientific method. Finding truth starts with a hypothesis. Building a better future starts with a dream. Envisioning a future we would choose to live in wastes nobody's time. It is the first step of progress.
Circularity owns a surplus of models and runs a deficit of dreams. Meadows told us which one was missing. More of us should read this book to the end.
The rest of this letter is for Dynamo members — the people reading along with us. If you're here as a guest, you're welcome at the table. The marginalia is reserved. Join the Dynamos.
