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Evolution of Complex Systems. Lecture 13: Politics and economics – interactions Peter Andras / Bruce Charlton peter.andras@ncl.ac.uk bruce.charlton@ncl.ac.uk. Objectives. Evolution by interaction between the systems of politics and economics Setting environmental selection pressures
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Evolution of Complex Systems Lecture 13: Politics and economics – interactions Peter Andras / Bruce Charlton peter.andras@ncl.ac.uk bruce.charlton@ncl.ac.uk
Objectives • Evolution by interaction between the systems of politics and economics • Setting environmental selection pressures • Change of rules • Change of boundaries • Emergence of interface systems
Logic of power • Power: power to set rules of communications, power to distribute resources to regenerate and expand the society • Political communications: satisfy the logic of power – identity of the political system
Political institutions • Sets of constraints that define subsystems • Parties, Parliament, election
Political communications • Everybody participates: elections • Professional political communications: professional politicians
Products • Human communications produce quasi-permanent changes in the environment memories of human communications • E.g., key, ball, book
Services • Temporary changes in the environment produced by human communications memories of human communications • E.g., hair dressing, cloth tailoring
Exchanging products and services • Economic communications: communications about exchanging products and services – communications about object/service memories • Special communication rules
Money • Universal exchange product • Simplification expansion
Banks • Regulate the amount of money (create or absorb money) • Modelling the economy
Paper money • Value by convention • Further simplification and expansion • Next: electronic money
Politics and rules • Politics power setting the rules of communications • Among other setting the rules for economic organisations
Bell • Biggest American telephone company (American Telephone and Telegraph Company – AT&T – parent company of the Bell System, 1875) • Practical monopoly
Anti – monopoly legislation • Power talk about monopolies • Winning power by anti – monopoly agenda • Translation into anti – monopoly legislation
Dividing the Bell • Regional Bell companies – 1984 • Opening up of local and long distance telephone markets
Competition in the market • New political environment represented by anti – monopoly legislation • New environmental pressures new kind of competition • New companies emerged in the long distance market, and they won a large share of the market (e.g., Sprint, MCI, WorldCom)
Economy and people • Growth: more money, more goods and services, better life • Stagnation and shrinking: less money, fewer products and services, lower quality and less enjoyable life
Elections and economy • Election time: parties formulate their economic policy to win popular support • Growth: the government praises itself, opposition tries to find alternative critiques (e.g., morality) • Shrinking and stagnation: government comes up with new vision and promises, opposition argues that everything is wrong because of the government
Competition of parties • Economy sets the stage for the competition, setting the selection pressures (e.g., maintaining or changing current economic policies) • Economic selection pressures contribute to the selection of parties in their competition in the context of the political system
Money and politics • Ministry of finance • How much money is in the economy / should be in the economy ?
Fiscal policy • Taxation • How much part of the money exchanged for other products or services should go to the government ?
Monetary policy • Regulation of the banks and of the amount of money present in the economy • E.g., setting base interest rates, level of bank reserve
Inflation • Small – moderate: usual • Change of money evaluations of goods and services
Printing money • Governmental intervention to pay the bill of the government (e.g., government loans, budgetary prescriptions) • Germany 1920s, Brazil 1980s, Bulgaria 1990s
Hyper inflation • Rapid change of valuations of goods and services triggered by the availability of large amounts of money (e.g., money printed by the government) • Unpredictable prices
Politics and inflation • Politics printing money • Communication contents inflated in economics • The rules of economics change in inflation • Interpenetration of economics by politics
Unequal distribution of economic resources • Economic communications • Need of economic resources • Unequal distribution – e.g. France late 18th century, Russia early 20th century
Topics of politics • Power talk: what helps to get and keep political power • Inequality of economic resources – good topic
Revolutionary politics • Economics influences the rules of politics • New politics / changing politics • Interpenetration of politics by economics by changing the rules of politics
Communism • Political system about resource distribution • Idea: general equal sharing • After 1917 / 1947
Issues in communism • Relevance of party documents • Reporting according to plans
Economics in communism • Many economic decisions are political decisions • They reference frequently political documents • E.g., producing product for the deposit to keep workers working
Small economics in communism • Politics takes over a large part of economics • Politics determines many economic exchanges and many formerly economic communications
State services • Railroads, energy services, telecommunications
Operations in state economy • Political logic mixed with economic logic • Service should be provided at politically determined levels • Typical: large bureaucracy, deficit, low average and variance of quality
Economics and state economy • Political objectives and economic realities • Rules influenced by economics
Privatisation • Economics takes over • Political rules loose their effect • Economic rules become more determinant
Effects of privatisation • If economics works in competitive manner: short decrease of output, shedding bureaucracy, fast growth soon • If the economics does not work in competitive manner: continual need for state support, high prices and low service quality, still too much influence of politics
Economics and privatisation • Economics takes over a part of politics (a set of political communications)
Economy and politics • Money and regulation of the money • Monetary politics
Monetary politics • Specialist political language • Experts and expert MPs • Ministry of finance • New system growing at the interface
Party finances • Very important to run the party • Payments, budget, party finances
Party economics • Treasurer • Special communications and rules • New system emerges at the interface: party economics
Summary • Politics and economics • Interpenetration and interaction: • Providing environmental selection pressures • Change of rules • Change of boundaries • Emerging new systems at interfaces
Q&A – 1 • Is it true that the money is a form of economic communications ? • Is it true that the logic of economics is: is this communication leading to more or less money ? • Is it true that deflation is a form of economy acting on politics changing its rules ? • Is it true that nationalization is a way of politics acting on economics changing its boundaries ?
Q&A – 2 5. Is it true that revolutionary politics is the effect of the economics on politics by changing the rules of politics ? 6. Is it true that by allowing pubs to keep open after 11pm the competition in the pub/club sector of the economy is changing ? 7. Is it true that the economy is always the single major issue of opposition talks at elections ? 8. Is it true that there are several interface systems between politics and economics ?