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Challenges of Complexity Balancing the Ideal of Europe with the Reality of Diversity Seán Challenges of Complexity Balancing the Ideal of Europe with the Reality of Diversity Seán Cleary 21 st International Summer University The Institute of Advanced Studies Kőszeg, June 21, 2015

Air connectivity Air connectivity

3 Internet connectivity 3 Internet connectivity

One Belt one Road One Belt one Road

The Challenge of Complexity The Challenge of Complexity

Complex Systems r Complex systems exhibit several defining characteristics (Kastens et al. , 2009): Complex Systems r Complex systems exhibit several defining characteristics (Kastens et al. , 2009): r r r Feedback loops , where change in a variable, results either in amplification or dampening of the change Many strongly interdependent variables , with multiple inputs contributing to observed outputs – attribution of causality difficult Chaotic behaviour : extreme sensitivity to initial conditions, fractal geometry, and self -organizing criticality Multiple (meta)stable states , where a small change in conditions may precipitate a major change in the system Non-Gaussian distribution of outputs

Complex adaptive systems r CAS are dynamic systems able to adapt in, ecologies, societies) Complex adaptive systems r CAS are dynamic systems able to adapt in, ecologies, societies) and artificial systems (parallel and distributed computing systems, AI systems, artificial neural networks) are characterized by apparently complex adaptive behaviours due to often nonlinear, spatio-temporal interactions among a large number of component systems at different levels of organization 7 19 -Mar-18 r Many natural (brains, immune systems, © Parmenides Foundation and evolve with, changing environments - no conceptual separation between a system and its environment: The system is closely linked with other related systems, making up an ecosystem. Change is co-evolution of all related systems, not adaptation to a separate environment.

© Parmenides Foundation What we use to make sense of complexity 19 -Mar-18 8 © Parmenides Foundation What we use to make sense of complexity 19 -Mar-18 8

Megatrends to 2030 r Continuation of geo-economic trends - significant inflection points r Higher Megatrends to 2030 r Continuation of geo-economic trends - significant inflection points r Higher returns to capital; falling returns to labour – rising inequality and social tensions r Breakthrough disruptive congruent technologies r Return of geopolitics r Weakening of paradigm of representative democracy r Reversion [in some areas] to more-primitive identities r Rise in migratory flows r Onset of post-Westphalian order r Gaia in the Anthropocene r Rising pressure on planetary boundaries, evidenced by rising incidence of extreme weather events

Megatrends in context Megatrends in context

Megatrends in context r Drivers: Disruptive new congruent technologies (3); Gaia in the Anthropocene Megatrends in context r Drivers: Disruptive new congruent technologies (3); Gaia in the Anthropocene (8) r Pivotal factor: revival of geopolitics (1) r Outcomes: Weakening of representative democracy (2); Jobless growth (7); migratory flows (6); increasing returns to capital/falling returns to labour (5) r Currently marginal element: Dominant geo-economic trend (4)

Megatrends in context Megatrends in context

Risks in the System Risks in the System

WEF Global Risks 2012 WEF Global Risks 2012

Global Risks 2013: World Economic Forum Risk Interconnection Map Global Risks 2013: World Economic Forum Risk Interconnection Map

WEF Global Risks 2014 Risk Interconnection Map WEF Global Risks 2014 Risk Interconnection Map

WEF Global Risks 2015 Risk Interconnections map WEF Global Risks 2015 Risk Interconnections map

Governmental responses r Collecting unprecedented data/information - extracting meaning - complex algorithms, machine learning, Governmental responses r Collecting unprecedented data/information - extracting meaning - complex algorithms, machine learning, AI r Legal/normative boundaries between war/peace, and permitted/proscribed behaviours blurring/being eroded r Actively inform both governance and state-sanctioned violence: Human/AI interfaces in drone warfare; and transformation of spaces of domestic social dissent r Combination of AI/automated deployment of remote force opens door for terrorists, criminals, government agencies to kill anonymously/pre-emptively. r Democratic state founded on social contract between citizens and government. Use of algorithms/AI as means of governance and punishment, creates opaque and unaccountable space, vitiates premise of democratic system. Basis of governmental, and potentially state! Legitimacy at risk; will have to be redefined. 18

no m co l e ba ed eg rat Inadequate global polity es United no m co l e ba ed eg rat Inadequate global polity es United Nations International Monetary Fund/World Bank WTO ICJ/ICC…. i iet Int Resurgent nationalism Sectarianism Interstate conflict c so al gl o lob g ed tur ac Technological integration Global financial institutions Global supply chains Fr y Structural and systemic tensions

Transformative Tensions “One Road, One Belt” Asian Infrastructure Investment Bank Silk Road Fund New Transformative Tensions “One Road, One Belt” Asian Infrastructure Investment Bank Silk Road Fund New (BRICS) Development Bank C ns titu PR tio ns United Nations International Monetary Fund/World Bank WTO ICJ/ICC… Po st- W se W on sp II I Re Reduction of dependency; Rearmament; Control nearabroad Russian Federation Response

19 -Mar-18 © Parmenides Foundation The European Union May 2016 21 19 -Mar-18 © Parmenides Foundation The European Union May 2016 21

© Parmenides Foundation Tensions among European publics 19 -Mar-18 22 © Parmenides Foundation Tensions among European publics 19 -Mar-18 22

© Parmenides Foundation …and the tensions are unresolved 19 -Mar-18 23 © Parmenides Foundation …and the tensions are unresolved 19 -Mar-18 23

The European Union r Economic-political union of 28 member states with area of 4, The European Union r Economic-political union of 28 member states with area of 4, 325 m km 2, population >508 m [7. 3% of global], nominal GDP $18. 5 tn [24% of global] and hybrid intergovernmental and supranational decision -making through European Council, Council of the European Union, European Parliament, European Commission, Court of Justice of the European Union, European Central Bank, and European Court of Auditors. r Monetary union created in 1999 - full force in 2002. Now 19 member states using the euro. r CFSP gives EU role in external relations and defence. 24 19 -Mar-18 applicable in all member states. Within Schengen Area, passport controls abolished. Aim to ensure free movement of people, goods, services, and capital, enact legislation in justice and home affairs, and maintain common policies on trade, agriculture, fisheries and regional development. © Parmenides Foundation r Internal single market through legal system

European Economic Community (EEC - 1958), formed by the Inner Six [France, Germany, Italy, European Economic Community (EEC - 1958), formed by the Inner Six [France, Germany, Italy, Belgium, Luxembourg, Netherlands]. r The community and its successors have grown in size by accession of new member states, and in power by the addition of policy areas. r Maastricht Treaty established the European Union in 1993 and introduced European citizenship. r Latest major amendment to the constitutional basis of the EU, Treaty of Lisbon, came into force in 2009. 25 19 -Mar-18 r Origins in the European Coal and Steel Community (ECSC – 1951 -2002), EURATOM – 1958, and the © Parmenides Foundation Origins of the European Union

Challenges of Complexity in the EU: Maastricht 1992 26 19 -Mar-18 Community treaty – Challenges of Complexity in the EU: Maastricht 1992 26 19 -Mar-18 Community treaty – adopted to enable price stability with entry of new members. r Control inflation, public deficit & public debt, effect exchange rate stability & interest rate convergence. r Inflation rates: No more than 1. 5% above average of 3 best performing EU states r Annual government deficit: Ratio of the annual deficit to GDP not >3%. Only temporary excesses for exceptional cases. r Government debt: Gross government debt to GDP not >60%. If not achieved in specific conditions, must moving satisfactorily. [At end of 2014, only Estonia, Latvia, Lithuania, Slovakia, Luxembourg, and Finland met this target. ] r Exchange rate: Applicants must have been in ERM II under EMS for two years, and not devalued its currency in this time. r : L-T interest rates Nominal L-T interest rate not >2% percentage above three lowest inflation member states. © Parmenides Foundation r Maastricht [convergence] criteria – art. 121 of the

Challenges of Complexity in the EU: The European Central Bank - 1999 r ECB Challenges of Complexity in the EU: The European Central Bank - 1999 r ECB is central bank for the Euro; manages monetary policy of Eurozone (19 EU states). r ECB succeeded – from 1 June 1998 – price stability in the Eurozone. The basic tasks – Art. 3 – are to define & implement monetary policy for Eurozone; conduct foreign exchange operations; manage foreign reserves of ESCB; and administer financial market infrastructure. 27 19 -Mar-18 r ECB objective – Art. 2 of Statute – to maintain © Parmenides Foundation European Monetary Institute established to manage transitional issues and prepare for creation of the ECB and European System of Central Banks (ESCB). ECB assumed full powers when Euro adopted on 1 January 1999.

Optimal Currency Areas r Optimum currency area (OCA - geographical region in which economic Optimal Currency Areas r Optimum currency area (OCA - geographical region in which economic efficiency increased when whole region shares one currency. Eurozone is most recent/largest created OCA. r Four key criteria: r r Capital mobility & price and wage flexibility so market forces distribute money and goods to where needed. Risk sharing system/fiscal transfer mechanism to redistribute money to areas/sectors in need. Similar business cycles to allow central bank to promote growth in downturns and contain inflation in booms. © Parmenides Foundation r Labour mobility - physical, absence of cultural barriers; institutional arrangements (e. g. pensions) EU prohibits inter-state fiscal transfers in Stability and Growth Pact. In Eurozone debt crisis this was abrogated in April 2010. 28 19 -Mar-18 r

Quo Vadis Europe – Shared economic destiny r Economic health of union must be Quo Vadis Europe – Shared economic destiny r Economic health of union must be greater than sum of its parts. Economic logic: Greater/more efficient movement of goods, services, capital & people between national economies, brings individual and common benefit r EU states with fiscal deficits had to cut spending to eliminate deficits. . r But no fiscal expansionism took place: Increased EU’s reliance on monetary policy. ECB, like US Fed, provided liquidity, inflated equity markets, without restoring activity in “real” economy: No job creation, and increases income and wealth inequality. r Fiscal & monetary policy should be coordinated. Fiscal policy has greater impact on employment; monetary policy should have a significant impact on inflation. 29 19 -Mar-18 Netherlands, Denmark in 2010 – could (and should, in interests of Union) – adopt expansionist fiscal stance to compensate for contractive effects of austerity measures in states with fiscal deficits © Parmenides Foundation r Economies with fiscal surpluses – German, Austria,

Quo Vadis Europe – Burden-sharing r > 1 m migrants and refugees entered Europe Quo Vadis Europe – Burden-sharing r > 1 m migrants and refugees entered Europe in 2015: 280, 000 in 2014. >135, 000 in first two months of 2016. >80% arriving by boat in 2015 came from Syria, Iraq and Afghanistan. Most say aiming for Germany, Sweden or the UK. r Poverty/insecurity also driving migration from Eritrea, Somalia, Pakistan, Somalia r As EU states to east struggle with mass plan to relocate 120, 000 migrants across Europe over two years, with binding quotas. Joint rules in Common European Asylum System - but implementing them a challenge. Romania, Czech Republic, Slovakia and Hungary opposed. r November 2015: EU approved € 3 bn/year help Turkey cope with 2. 2 m Syrian migrants, and enable returns from Europe – Schengen zone access for Turks. Uncertainties and problems …. 30 19 -Mar-18 r September 2015: EU interior ministers approved © Parmenides Foundation movements, some closed borders, leaving tens of thousands of migrants stranded in Greece.

Embedded, complex adaptive systems and a spontaneous symmetry break r Human society is complex Embedded, complex adaptive systems and a spontaneous symmetry break r Human society is complex system , incapable of directive control; embedded in larger complex system –bio-geosphere r Symmetry break occurs when working of complex system transitions from a symmetric but ill-defined state, to more clearly-defined state. In spontaneous symmetry breaking, underlying laws are unchanged, but the system changes spontaneously from a symmetrical, to an asymmetrical, state r Profound, multivariate asymmetry between scale and depth of global economy, absence of a commensurate, inclusive community , and the defective state of global polity , may make spontaneous symmetry break inevitable

The Global Agenda r Delivering environmentally and socially sustainable economic growth r Addressing poverty The Global Agenda r Delivering environmentally and socially sustainable economic growth r Addressing poverty and inequality through the lens of equity r Focusing on the sources of global and national vulnerability to promote security at multiple scales r Sharing the norms and values that enable global coexistence, and working to respect and reconcile cultural differences; and r Improving the quality of global governance and our global institutions 32

Addressing the Challenge r An integrated, systemic perspective matters - the five pillars of Addressing the Challenge r An integrated, systemic perspective matters - the five pillars of the Global Agenda acknowledge the complexity we must address, and the need to bring insights from different disciplines to bear r National interests and cultural values matter – in a multipolar world there are no means of imposing global solutions. r Norms matter – beliefs, signals and cues used to induce appropriate attitudes, and discourage inappropriate behaviour r Scale matters – securing agreement on asymmetric sacrifices to bring future rewards may be possible in small groups; nearly impossible in large ones. r Balance matters – in individual behavior; in social constructs; and on a global scale 33

Human biological and social balance Y TH W AN PA T EM Procreation Preservation Human biological and social balance Y TH W AN PA T EM Procreation Preservation Accumulation Survival Environmental scanning Amygdalae Adrenalin FEAR Bonding Community Shared identity Common norms

Diversity and similarity of values r Culture, as Clifford Geertz has noted, is the Diversity and similarity of values r Culture, as Clifford Geertz has noted, is the context for “. . . the social production of meaning. ” r Diversity of values between societies well established; as is communality of some - r r Security, dignity, opportunity, justice, equity and sustainability well represented in most canons, but different forms in different contexts All societies discourage sociopathic behaviour seen to damage social harmony Bravery and empathy are almost universally promoted, probably because they promote evolutionary fitness Respect for the ecosystem on which one depends for survival also aligned with individual fitness and social benefit, not least because it limits the risk of a tragedy of the commons

SI BI LI SP RE MM UN I EM Essential for innovation, creativity and SI BI LI SP RE MM UN I EM Essential for innovation, creativity and progress ST SY CO TY E CO Humanity depends on ecosystem for survival R FO T ON EC SP Necessary for society to survive RE TY Societal harmony PERSONAL FREEDOM Balances vary, but recognised in Abrahamic faith traditions, Buddhism, the Bhagavad-Gita and other Mukhya Upanishads, the Tao Te ching, Confucian ren & li, and Aristotelian Golden Mean.

The WEB of Global Governance T W EN EL M GE FA GA RE The WEB of Global Governance T W EN EL M GE FA GA RE EN Rights Quality Inclusivity Advancement Neighbourhoods Limits Respect Security BOUNDARIES Shared norms High cultures Celebration Tolerance

Mitigating and managing risk in uncertain conditions r Invest in insight and foresight r Mitigating and managing risk in uncertain conditions r Invest in insight and foresight r first-rate, relevant information, skills and knowledge r Use to r r mitigate and manage risks assumed build exceptional qualities of resilience against shocks r Brace for certainty of turbulence; accept need to manage risks inherent in uncertain conditions r r ensure organic ability to anticipate rapid discontinuous, non-linear change resilience allowing for adaptation and management of shocks one could not foresee.

The Second Coming, W. B. Yeats 1919 Turning and turning in the widening gyre The Second Coming, W. B. Yeats 1919 Turning and turning in the widening gyre The falcon cannot hear the falconer; Things fall apart; the centre cannot hold; Mere anarchy is loosed upon the world, The best lack all conviction, while the worst Are full of passionate intensity. 39 19 -Mar-18 The ceremony of innocence is drowned; © Parmenides Foundation The blood-dimmed tide is loosed, and everywhere