Untangling Complex Systems, page 31
) ( −
))
1 F, ρ = k 2 k
/ 1, and r 12 = ( k 12 KB
k 1 KA , r 21 = ( k 21 KA
k 2 KB . The final appear-
ance of the two differential equations is
da = a(1− a− r 12 b) = f
τ
d
db = ρ b(1− b+ r a
21 ) = g
dτ
The steady-state solutions are: ( a , b )
ss
ss = (0, 0); (1, 0); (0, 1); 1
( − r ) ( r r ),( r )
12
1+ 12 21 1+ 21
1
( + r r )
< .
12 21 ). The latter admits positive values for variable a only when r 12
1
We use the linear stability analysis to determine the character of the solutions. The
Jacobian is
1− 2 ass − r 12 bss
− r 12 a
J
ss
=
ρ r b
21 ss
ρ − 2ρ bss + ρ r a
21 ss
It derives that the steady state (0, 0) is unstable because det ( J ) = ρ > 0 and tr( J ) =1+ ρ > 0.
The steady state (1, 0) is a saddle point. In fact, det ( J ) = −ρ (1+ r 21) < 0.
The solution (0, 1) is a saddle point when r
( )
ρ (1 12 )
12 < 1, because det J
= −
− r < 0. On
the other hand, it represents a stable steady state when r
( )
12 > 1, because det J
> 0 and
tr ( J ) = −ρ + (1− r 12 ) < 0.
Finally, the last steady-state solution gives
ρ (1+ r 21)( r 12 − )
1
ρ r 12 r 21 (1+ r 21)( r 12 − )
1
det ( J ) = −
−
(1+ r
2
2
(
)
12 r 21 )
1+ r 12 r 21
( r 12 − )1 ρ (1+ r 21)
tr ( J ) = (
1+ r 12 r 21) − (1+ r 12 r 21)
When
r 12 < 1, det( J ) > 0 and tr( J ) < 0. Therefore, we have a stable steady state.
The overall situation is depicted in Figure 5.16. Plot (i) refers to the case r 12 < 1, where we have four possible solutions and the stable one corresponds to a system where population A is not entirely extinct whereas population B is more abundant than its carrying
capacity. Plot (ii) describes the evolution when r 21 > 1. In this case, the rate constant k is
21
so large (assuming that the carrying capacities of A and B are roughly the same) that A dies
out and population B converges to a value that corresponds to its carrying capacity. It is
beneficial for both if B does not deplete the resources of population A completely.
5.9. The differential equations describing the amensalism are:
dA
k−1
k 12
A
k
=
12
k 1 FA 1−
A −
B
k 1 FA 1
B
dt
=
−
−
k 1 F
k 1 F
KA k−1 K
A
ddB
k−2
B
=
k 2 FB 1−
B
k 2 FB 1
dt
=
−
k 2 F
KB
If we nondimensionalize them, by using the variables a = AC A, b = BC B, τ = tCt, and the constants AC = 1/ KA, BC = 1/ KB, tC = k 1 F , ρ = k 2 k
/ 1, and r 12 = k 12 k 1
− K B K A , the equations
become:
The Emergence of Temporal Order in the Ecosystems
145
(i)
g
1/ r 12
b
1
f
a
1
(ii)
g
b
1
1/ r 12
f
a
1
FIGURE 5.16 Phase space in the case of parasitism when r 12 < 1 in (i) (upper graph), and when r 21 > 1 in (ii) (lower graph).
da = a(1− a− r 12 b) = f
dτ
db = ρ b(1− b) = g
dτ
The solutions of steady state are: ( a , b )
( − r , ). To gain insight on
ss
ss = (0, 0); (1, 0); (0, 1); 1
12 1
their stability, we use the linear stability analysis. The Jacobian is
1− 2 ass − r 12 bss
− r 12 a
J
ss
=
0
ρ −
2ρ bss
The steady state (0, 0) is unstable because det ( J ) = ρ > 0 and tr( J ) =1+ ρ > 0.
The steady state (1, 0) is a saddle point; in fact, det ( J ) = −ρ < 0.
The steady state (0, 1) is a saddle point when r
( ) ρ (1 12)
12 < 1; in fact, det J
= −
− r < 0. On the
other hand, it is a stable solution when r
( )
( )
12 > 1. In fact, det J
> 0 and tr J =1− r 12 − ρ < 0.
When
r
( r , )
( ) ρ (1 3 12)
12 < 1, the only stable solution is 1 − 12 1 , that has det J
=
+ r > 0 and
tr ( J ) = −1− r
3 12 − ρ < 0. In synthesis, the possible dynamical scenarios are shown in
Figure 5.17. Plot (i) refers to the case of r 12 < 1, whereas plot (ii) to r 12 > 1. Assuming that the two populations have similar carrying capacities when the ratio ( k / ) is small, the final
12 k−1
steady state has a
and b
/ k ) is large,
ss < KA
ss = 1. On the other hand, when the ratio ( k 12 −1
population A extinguishes, and B reaches its carrying capacity.
5.10. The differential equations describing the commensalism are:
dA
k−1
k 12
A
k
=
12
k 1 FA 1−
A +
B
k 1 FA 1
B
dt
=
−
+
k 1 F
k 1 F
KA k−1 K
A
ddB
k−2
B
=
k 2 FB 1−
B
k 2 FB 1
dt
=
−
k 2 F
KB
If we nondimensionalize them, by using the variables a = AC A, b = BC B, τ = tCt, and the constants A
(
) ( − ))
C = 1/ K A, BC = 1/ K B, tC = k 1 F , ρ = k 2 / k 1, and r 12 = ( k 12 K B
k 1 KA , the
equations become:
146
Untangling Complex Systems
1/ r 12
b
g
1
f
(i)
0
a
1
b
1
g
1/ r 12
(ii)
f
a
1
FIGURE 5.17 Phase space in the case of amensalism, when r 12 < 1 in (i) (upper graph) and when r 12 > 1 in (ii) (lower graph).
b
f
g
1
1
a
FIGURE 5.18 Phase space in the case of commensalism.
da = a(1− a+ r 12 b) = f
dτ
db
= b
ρ (1− b) = g
dτ
The steady-state solutions are: ( a , b )
( + r , ). To gain insight on
ss
ss = (0, 0); (1, 0); (0, 1); 1
12 1
their stability, we use the linear stability analysis. The Jacobian is:
1− 2 ass + r 12 bss
r 12 a
J
ss
=
0
ρ −
2ρ bss
The solution (0, 0) represents an unstable steady state: in fact, tr ( J ) =1+ ρ > 0 and
det ( J ) = ρ > 0. The solution (1, 0) represents a saddle point because det ( J ) = −ρ is negative. Even the solution (0, 1) is a saddle point. In fact, det ( J ) = −ρ (1+ r 12 ) < 0.
Finally, the solution 1
( + r , )
( ) ρ (1 12)
12 1 is a stable steady state because det J
=
+ r > 0 and
tr ( J ) = −1− r 12 − ρ < 0. The overall behavior is shown in Figure 5.18. The relationship of commensalism favors population A, whose abundance at the stable steady state is larger
than K and is not damaging for population B that reaches its own carrying capacity.
A
The Emergence of Temporal
6 Order in the Economy
…the ideas of economists and political philosophers, both when they are right and when they
are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by
little else.
John Maynard Keynes (1883 –1946 AD)
6.1 INTRODUCTION
The economy is strictly bound to the ecology. In Chapter 5, we learned that ecology studies the relationships among living beings within their environment, and how these relationships evolve. Each
living-being strives to survive and reproduce. On the other hand, the economy studies how human
beings, organized in societies, strive to reach their psycho-physical well-being, by exploiting natu-
ral resources, either as they are or after transforming them into goods and services through work.
The terms economy and ecology share the Greek etymological root οίκος, which means “house.”
The word ecology was coined by the interdisciplinary figure of Ernst Haeckel1 with the meaning of
“study about the house, dwelling place or habitation of wildlife.” The word economy means liter-
ally “household management.” In the fourth century BC, Xenophon wrote the Oeconomicus. In the
Oeconomicus, the philosopher Socrates discusses the meaning of wealth. He identifies wealth not
merely with possessions, but also with usefulness and well-being. The wise Socrates pinpoints in
moderation and hard work the two necessary ingredients to succeed in household management.
Such ideas are still valid. However, in the last two hundred years or so, the social, political and
economic scenarios have changed dramatically. Therefore, a new discipline has been born, politi-
cal economy, with a meaning outlined by Adam Smith2 in his book The Wealth of Nations (1776).
Political economy is the science that studies how single human beings and societies choose to exploit
scarce resources to produce various types of goods and services and distribute them for use among
people. Since then, economists have been grappling with two fundamental questions: how wealth
can be created and how wealth should be allocated. The ultimate answer seems to be that economy
is a complex adaptive system (Beinhocker 2007). In economy there is a huge number of stocks and
flows dynamically connected in an elaborate web of positive and negative feedback relationships;
such feedback relationships have delays and operate at different timescales. The economic systems
1 Ernst Haeckel (1834, Potsdam – 1919 AD) was a German biologist, naturalist, philosopher, professor of comparative anat-omy, and artist. He coined many words commonly used today in science, such as ecology, phylum, and phylogeny. As
artist fond of the amazing forms of life on earth, Haeckel published a book titled Art Forms in Nature (1974) wherein he depicted 100 illustrations of various organisms, many of which were first discovered by Haeckel himself.
2 Adam Smith (1723, Kirkcaldy–1790, Edinburgh) was a Scottish moral philosopher and the pioneer of political economy.
His book titled The Wealth of Nations is considered the first modern work on economics.
147
148
Untangling Complex Systems
evolve as ecosystems do. It is not by chance that Darwin (1859) proposed the concept of evolution in
biology after his Beagle expedition and after reading An Essay on the Principle of Population, as It
Affects Future Improvements of Society written by the English economist Thomas Malthus in 1798.
In his book, Malthus presented the economy as a struggle between population growth and human
productivity. Nowadays, the human population is so abundant (more than 7 billion), and human
activities to produce goods and services are so invasive, widespread, and proceeding at such high
pace that they affect the stability of many ecosystems in our planet. Some scientists even believe
we are living in a human-dominated geological epoch, called Anthropocene (Lewis and Maslin,
2015). Since the beginning of Anthropocene, humans have had the power of influencing the climate
and the integrity of any ecosystem.3 Therefore, it is clear, that now more than ever, economy and ecology are strictly intertwined. The tight relationship between economy and ecology has been
sanctioned by the Romanian-American mathematician and economist Georgescu-Roegen, who,
in 1971, published his “epoch-making” contribution titled The Entropy Law and the Economic
Process. Georgescu-Roegen’s book contributed to merge economics and ecology and gave birth to
a new discipline: Ecological Economics. The fusion has undoubtedly promoted the recent meta-
morphosis of political economy from linear to circular productive processes. Businesspeople and
governments are striving to design circular economic processes, with the aim of minimizing waste.
The circular economy turns goods that are at the end of their service into resources (Stahel 2016)
because the economic systems should work as if they were healthy ecosystems. In any healthy
ecosystem, resources are exploited cyclically, and nothing is dumped: the waste of plants and
animals become food for fungi and bacteria, and fungi and bacteria repay by feeding plants and
animals with minerals. In a balanced ecosystem, nothing is useless. The same should happen in
the economy.
As the ecosystems have characteristic dynamics and laws, so does the economy. The main char-
acters and variables of the productive processes reveal dynamics that are formally close to those
found in ecology because both disciplines describe far-from-equilibrium systems.
In the next three paragraphs, I will present the main laws and phenomena involved in the eco-
nomic processes. Then, we will discover that phenomena of temporal self-organization can emerge
even in economy. In fact, in the economy, we encounter business cycles that can be interpreted as if
they were due to predator-prey-like relationships.
6.2 THE ECONOMIC PROBLEM
When economists analyze the origin and the allocation of wealth at a small scale, focusing on indi-
viduals or tiny groups of people or single companies or single productive sectors, they deal with
microeconomic systems. On the other hand, when economists study the origin and allocation of
wealth at the holistic level, focusing on entire nations and their GDPs (Gross Domestic Products),
they deal with macroeconomic systems. Whatever is the level of analysis, the main characters of
the economy are humans with their psycho-physical demands and requests. Humans strive to fulfill
all their vital demands and satisfy all their reasonable requests by exploiting limited and sometimes
scarce resources.
In any economic system, humans may be grouped in two sets: producers and consumers. Producers
are those who make goods or provide services. Consumers are those who buy and pay for goods and
services. Every human is a consumer. But whoever has a job, he/she is also a producer. The interplay
3 The beginning of the Industrial Revolution, in the late eighteenth century, has most commonly been suggested as the start of the Anthropocene. The researchers Lewis and Maslin demonstrate that Anthropocene may date back to the seventeenth century when the Europeans arrived in the Americas. Colonization of the New World led to the deaths of about 50 million indigenous people, most within a few decades of the seventeenth century due to smallpox. The abrupt near-cessation of farming across the continent and the subsequent re-growth of Latin American forests and other vegetation caused a significant drop of carbon dioxide from the atmosphere.
The Emergence of Temporal Order in the Economy
149
between producers and consumers allows finding the solution to the economic problem of WHAT,
HOW, and FOR WHOM to produce goods and services (Samuelson and Nordhaus 2004).4 The strat-
))
1 F, ρ = k 2 k
/ 1, and r 12 = ( k 12 KB
k 1 KA , r 21 = ( k 21 KA
k 2 KB . The final appear-
ance of the two differential equations is
da = a(1− a− r 12 b) = f
τ
d
db = ρ b(1− b+ r a
21 ) = g
dτ
The steady-state solutions are: ( a , b )
ss
ss = (0, 0); (1, 0); (0, 1); 1
( − r ) ( r r ),( r )
12
1+ 12 21 1+ 21
1
( + r r )
< .
12 21 ). The latter admits positive values for variable a only when r 12
1
We use the linear stability analysis to determine the character of the solutions. The
Jacobian is
1− 2 ass − r 12 bss
− r 12 a
J
ss
=
ρ r b
21 ss
ρ − 2ρ bss + ρ r a
21 ss
It derives that the steady state (0, 0) is unstable because det ( J ) = ρ > 0 and tr( J ) =1+ ρ > 0.
The steady state (1, 0) is a saddle point. In fact, det ( J ) = −ρ (1+ r 21) < 0.
The solution (0, 1) is a saddle point when r
( )
ρ (1 12 )
12 < 1, because det J
= −
− r < 0. On
the other hand, it represents a stable steady state when r
( )
12 > 1, because det J
> 0 and
tr ( J ) = −ρ + (1− r 12 ) < 0.
Finally, the last steady-state solution gives
ρ (1+ r 21)( r 12 − )
1
ρ r 12 r 21 (1+ r 21)( r 12 − )
1
det ( J ) = −
−
(1+ r
2
2
(
)
12 r 21 )
1+ r 12 r 21
( r 12 − )1 ρ (1+ r 21)
tr ( J ) = (
1+ r 12 r 21) − (1+ r 12 r 21)
When
r 12 < 1, det( J ) > 0 and tr( J ) < 0. Therefore, we have a stable steady state.
The overall situation is depicted in Figure 5.16. Plot (i) refers to the case r 12 < 1, where we have four possible solutions and the stable one corresponds to a system where population A is not entirely extinct whereas population B is more abundant than its carrying
capacity. Plot (ii) describes the evolution when r 21 > 1. In this case, the rate constant k is
21
so large (assuming that the carrying capacities of A and B are roughly the same) that A dies
out and population B converges to a value that corresponds to its carrying capacity. It is
beneficial for both if B does not deplete the resources of population A completely.
5.9. The differential equations describing the amensalism are:
dA
k−1
k 12
A
k
=
12
k 1 FA 1−
A −
B
k 1 FA 1
B
dt
=
−
−
k 1 F
k 1 F
KA k−1 K
A
ddB
k−2
B
=
k 2 FB 1−
B
k 2 FB 1
dt
=
−
k 2 F
KB
If we nondimensionalize them, by using the variables a = AC A, b = BC B, τ = tCt, and the constants AC = 1/ KA, BC = 1/ KB, tC = k 1 F , ρ = k 2 k
/ 1, and r 12 = k 12 k 1
− K B K A , the equations
become:
The Emergence of Temporal Order in the Ecosystems
145
(i)
g
1/ r 12
b
1
f
a
1
(ii)
g
b
1
1/ r 12
f
a
1
FIGURE 5.16 Phase space in the case of parasitism when r 12 < 1 in (i) (upper graph), and when r 21 > 1 in (ii) (lower graph).
da = a(1− a− r 12 b) = f
dτ
db = ρ b(1− b) = g
dτ
The solutions of steady state are: ( a , b )
( − r , ). To gain insight on
ss
ss = (0, 0); (1, 0); (0, 1); 1
12 1
their stability, we use the linear stability analysis. The Jacobian is
1− 2 ass − r 12 bss
− r 12 a
J
ss
=
0
ρ −
2ρ bss
The steady state (0, 0) is unstable because det ( J ) = ρ > 0 and tr( J ) =1+ ρ > 0.
The steady state (1, 0) is a saddle point; in fact, det ( J ) = −ρ < 0.
The steady state (0, 1) is a saddle point when r
( ) ρ (1 12)
12 < 1; in fact, det J
= −
− r < 0. On the
other hand, it is a stable solution when r
( )
( )
12 > 1. In fact, det J
> 0 and tr J =1− r 12 − ρ < 0.
When
r
( r , )
( ) ρ (1 3 12)
12 < 1, the only stable solution is 1 − 12 1 , that has det J
=
+ r > 0 and
tr ( J ) = −1− r
3 12 − ρ < 0. In synthesis, the possible dynamical scenarios are shown in
Figure 5.17. Plot (i) refers to the case of r 12 < 1, whereas plot (ii) to r 12 > 1. Assuming that the two populations have similar carrying capacities when the ratio ( k / ) is small, the final
12 k−1
steady state has a
and b
/ k ) is large,
ss < KA
ss = 1. On the other hand, when the ratio ( k 12 −1
population A extinguishes, and B reaches its carrying capacity.
5.10. The differential equations describing the commensalism are:
dA
k−1
k 12
A
k
=
12
k 1 FA 1−
A +
B
k 1 FA 1
B
dt
=
−
+
k 1 F
k 1 F
KA k−1 K
A
ddB
k−2
B
=
k 2 FB 1−
B
k 2 FB 1
dt
=
−
k 2 F
KB
If we nondimensionalize them, by using the variables a = AC A, b = BC B, τ = tCt, and the constants A
(
) ( − ))
C = 1/ K A, BC = 1/ K B, tC = k 1 F , ρ = k 2 / k 1, and r 12 = ( k 12 K B
k 1 KA , the
equations become:
146
Untangling Complex Systems
1/ r 12
b
g
1
f
(i)
0
a
1
b
1
g
1/ r 12
(ii)
f
a
1
FIGURE 5.17 Phase space in the case of amensalism, when r 12 < 1 in (i) (upper graph) and when r 12 > 1 in (ii) (lower graph).
b
f
g
1
1
a
FIGURE 5.18 Phase space in the case of commensalism.
da = a(1− a+ r 12 b) = f
dτ
db
= b
ρ (1− b) = g
dτ
The steady-state solutions are: ( a , b )
( + r , ). To gain insight on
ss
ss = (0, 0); (1, 0); (0, 1); 1
12 1
their stability, we use the linear stability analysis. The Jacobian is:
1− 2 ass + r 12 bss
r 12 a
J
ss
=
0
ρ −
2ρ bss
The solution (0, 0) represents an unstable steady state: in fact, tr ( J ) =1+ ρ > 0 and
det ( J ) = ρ > 0. The solution (1, 0) represents a saddle point because det ( J ) = −ρ is negative. Even the solution (0, 1) is a saddle point. In fact, det ( J ) = −ρ (1+ r 12 ) < 0.
Finally, the solution 1
( + r , )
( ) ρ (1 12)
12 1 is a stable steady state because det J
=
+ r > 0 and
tr ( J ) = −1− r 12 − ρ < 0. The overall behavior is shown in Figure 5.18. The relationship of commensalism favors population A, whose abundance at the stable steady state is larger
than K and is not damaging for population B that reaches its own carrying capacity.
A
The Emergence of Temporal
6 Order in the Economy
…the ideas of economists and political philosophers, both when they are right and when they
are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by
little else.
John Maynard Keynes (1883 –1946 AD)
6.1 INTRODUCTION
The economy is strictly bound to the ecology. In Chapter 5, we learned that ecology studies the relationships among living beings within their environment, and how these relationships evolve. Each
living-being strives to survive and reproduce. On the other hand, the economy studies how human
beings, organized in societies, strive to reach their psycho-physical well-being, by exploiting natu-
ral resources, either as they are or after transforming them into goods and services through work.
The terms economy and ecology share the Greek etymological root οίκος, which means “house.”
The word ecology was coined by the interdisciplinary figure of Ernst Haeckel1 with the meaning of
“study about the house, dwelling place or habitation of wildlife.” The word economy means liter-
ally “household management.” In the fourth century BC, Xenophon wrote the Oeconomicus. In the
Oeconomicus, the philosopher Socrates discusses the meaning of wealth. He identifies wealth not
merely with possessions, but also with usefulness and well-being. The wise Socrates pinpoints in
moderation and hard work the two necessary ingredients to succeed in household management.
Such ideas are still valid. However, in the last two hundred years or so, the social, political and
economic scenarios have changed dramatically. Therefore, a new discipline has been born, politi-
cal economy, with a meaning outlined by Adam Smith2 in his book The Wealth of Nations (1776).
Political economy is the science that studies how single human beings and societies choose to exploit
scarce resources to produce various types of goods and services and distribute them for use among
people. Since then, economists have been grappling with two fundamental questions: how wealth
can be created and how wealth should be allocated. The ultimate answer seems to be that economy
is a complex adaptive system (Beinhocker 2007). In economy there is a huge number of stocks and
flows dynamically connected in an elaborate web of positive and negative feedback relationships;
such feedback relationships have delays and operate at different timescales. The economic systems
1 Ernst Haeckel (1834, Potsdam – 1919 AD) was a German biologist, naturalist, philosopher, professor of comparative anat-omy, and artist. He coined many words commonly used today in science, such as ecology, phylum, and phylogeny. As
artist fond of the amazing forms of life on earth, Haeckel published a book titled Art Forms in Nature (1974) wherein he depicted 100 illustrations of various organisms, many of which were first discovered by Haeckel himself.
2 Adam Smith (1723, Kirkcaldy–1790, Edinburgh) was a Scottish moral philosopher and the pioneer of political economy.
His book titled The Wealth of Nations is considered the first modern work on economics.
147
148
Untangling Complex Systems
evolve as ecosystems do. It is not by chance that Darwin (1859) proposed the concept of evolution in
biology after his Beagle expedition and after reading An Essay on the Principle of Population, as It
Affects Future Improvements of Society written by the English economist Thomas Malthus in 1798.
In his book, Malthus presented the economy as a struggle between population growth and human
productivity. Nowadays, the human population is so abundant (more than 7 billion), and human
activities to produce goods and services are so invasive, widespread, and proceeding at such high
pace that they affect the stability of many ecosystems in our planet. Some scientists even believe
we are living in a human-dominated geological epoch, called Anthropocene (Lewis and Maslin,
2015). Since the beginning of Anthropocene, humans have had the power of influencing the climate
and the integrity of any ecosystem.3 Therefore, it is clear, that now more than ever, economy and ecology are strictly intertwined. The tight relationship between economy and ecology has been
sanctioned by the Romanian-American mathematician and economist Georgescu-Roegen, who,
in 1971, published his “epoch-making” contribution titled The Entropy Law and the Economic
Process. Georgescu-Roegen’s book contributed to merge economics and ecology and gave birth to
a new discipline: Ecological Economics. The fusion has undoubtedly promoted the recent meta-
morphosis of political economy from linear to circular productive processes. Businesspeople and
governments are striving to design circular economic processes, with the aim of minimizing waste.
The circular economy turns goods that are at the end of their service into resources (Stahel 2016)
because the economic systems should work as if they were healthy ecosystems. In any healthy
ecosystem, resources are exploited cyclically, and nothing is dumped: the waste of plants and
animals become food for fungi and bacteria, and fungi and bacteria repay by feeding plants and
animals with minerals. In a balanced ecosystem, nothing is useless. The same should happen in
the economy.
As the ecosystems have characteristic dynamics and laws, so does the economy. The main char-
acters and variables of the productive processes reveal dynamics that are formally close to those
found in ecology because both disciplines describe far-from-equilibrium systems.
In the next three paragraphs, I will present the main laws and phenomena involved in the eco-
nomic processes. Then, we will discover that phenomena of temporal self-organization can emerge
even in economy. In fact, in the economy, we encounter business cycles that can be interpreted as if
they were due to predator-prey-like relationships.
6.2 THE ECONOMIC PROBLEM
When economists analyze the origin and the allocation of wealth at a small scale, focusing on indi-
viduals or tiny groups of people or single companies or single productive sectors, they deal with
microeconomic systems. On the other hand, when economists study the origin and allocation of
wealth at the holistic level, focusing on entire nations and their GDPs (Gross Domestic Products),
they deal with macroeconomic systems. Whatever is the level of analysis, the main characters of
the economy are humans with their psycho-physical demands and requests. Humans strive to fulfill
all their vital demands and satisfy all their reasonable requests by exploiting limited and sometimes
scarce resources.
In any economic system, humans may be grouped in two sets: producers and consumers. Producers
are those who make goods or provide services. Consumers are those who buy and pay for goods and
services. Every human is a consumer. But whoever has a job, he/she is also a producer. The interplay
3 The beginning of the Industrial Revolution, in the late eighteenth century, has most commonly been suggested as the start of the Anthropocene. The researchers Lewis and Maslin demonstrate that Anthropocene may date back to the seventeenth century when the Europeans arrived in the Americas. Colonization of the New World led to the deaths of about 50 million indigenous people, most within a few decades of the seventeenth century due to smallpox. The abrupt near-cessation of farming across the continent and the subsequent re-growth of Latin American forests and other vegetation caused a significant drop of carbon dioxide from the atmosphere.
The Emergence of Temporal Order in the Economy
149
between producers and consumers allows finding the solution to the economic problem of WHAT,
HOW, and FOR WHOM to produce goods and services (Samuelson and Nordhaus 2004).4 The strat-
