I still want to travel less, but the occasion is worth an exception. I am in Turin to follow David Lane’s course on what he calls “innovation in agent-artifact space”. David, I freely admit it, is one of my heroes. To begin with, he was in the economics program of the Santa Fe Institute – the cradle of complexity science and its multidisciplinary approach – from the very start: he was one of its directors after Brian Arthur got it its headstart. Sitting in one of his lectures is like riding in a rollercoaster designed by a sadistic architect: he darts from modelling ant behaviour in an anthill to flint axe bulding techniques in the Neolithic age. I hold on for dear life and hope my brain is still in one piece at the end of the lecture.

I’m convinced that the complexity approach to economics will bear fruit. It’s super-agile, because it borrows modeling strategies and hacks from biology, physics, computer science, network math, ethnography, you name it; and it’s very rigorous, because its champions tend to be better than traditional economists at math (though the latter are also very good in a different, more static kind of way). So I forge on, hoping to understand better the emergence phenomena unfolding right in my backyard – most recently the self-organization of the program for the Kublai Camp 2010. I’m stubborn enough that at some point I’ll see the light, I hope.

Two British students had a great idea: Cheatneutral, “a market-based solution to the unhappiness associated to cheating on your partner”. Since you can’t refrain from cheating, pay someone to be faithful for you, so that the overall quantity of infidelity worldwide stays the same.

It’s a joke, of course (though a surprising amount of people took it seriously), but one that stings: no wonder it spread on the media and reached the Houses of Parliament. Because, as the founders state on their website:

Cheatneutral is about offsetting infidelity. We’re the only people doing it, and Cheatneutral is a joke.

Carbon offsetting is about paying for the right to carry on emitting carbon. The Carbon offset industry sold £60 million of offsets last year, and is rapidly growing. Carbon offsetting is also a joke.

I started my career as an environmental economist. In the early 90s tradeable emission rights were already all the rage, supported by academia and the authorities, from the British government’s Blueprint for a Green Economy to the World Bank’s Global Environmental Facility. The logic of these instruments holds water, but at the price of accepting a static and machine-like vision of the economy that I now find undefendable. Time to have a good laugh with the Cheatneutral founders, and move on. (Hat tip: Francesco Silvestri @ Eco&Eco)

CriticalCity’s victory at TechGarage was simply incredible. For one, it was overwhelming: the Milano-based crew won all three prizes (the first prize; the Wired award; and the users’ award. In fact, several VCs in the room improvised a pool of seed money for funding the startup! This sounds like an urban legend, but it is actually true: read Marco’s report – he was there). On top of that, their project is uncompromisingly not-for-profit (“we can’t and won’t monetize our player’s commitment to improve their cities”, they said), while TechGarage is a sancta sanctorum of for-profit enterprise. Somehow, this coalition of investors and business angels perceived CC as too good an idea not to make it happen.

There is a third reason why this story is incredible. CC does not come out from one of the many startup incubators built by the private sector, like Telecom Italia’s Working Capital. It comes from an environment for designing creative projects launched by the Italian public sector: Kublai, that I have the honour to have designed and to manage on behalf of the Ministry of economic development (presentation in English here). Even Gianluca, Dpixel president and TechGarage patron, got in touch with CC as a member of the Kublai Award jury.

1. Communities, if they are oriented in the right way, can single out the best ideas. Kublai aggregates creative projects, not lolcats videos: they are complex, and their assessment is multifaceted and multidimensional. CriticalCity’s project document is more than 30 pages long with attachments. The Kublaian community’s consensus on CC predicted with great energy and effectiveness what happened at TechGarage and elsewhere.

2. The public sector, traditionally more public goods-oriented than the private, finds itself in a strategic position. Artifacts like Wikipedia, Delicious, Flickr, Twitter have public good nature, i.e. they are resources for everybody to use. Now, public goods are great, but being public means there is no rivalry in their consumption, so they are by definition difficult to monetize. Consequently many great web 2.0 out there have business model problems. This is an opportunity for the public sector, whose very mission is to produce public goods. After the tragedy of the commons started in the 1700s, digital technologies allow today to invert the trend and start creating new commons.

It seems to me that an extraordinary opportunity open up, such as I did not think I would see in my lifetime. We have democratized creativity, so that thinking up ambitious projects like CriticalCity and trying to make them happen has come to be a course of action available to normal young people like Augusto, Duccio, Chantal and the rest of them; we have web 2.0, a very powerful tool for aggregating ideas and people, and maybe now also for selecting the best among them; we are beginningto have a first generation of people that work on the side of public administrations, and understand the language, and can use the tools.

This first generation has today a new mission: rewire the economy to enable the production of new commons. Wikipedia and the rest may have shaky business models, but their value to the collective well-being and global competitiveness is undisputable. A government worth its salt must enable these things. And it can, because it wields very large resources that are normally used in very low productivity efforts: it has been remarked that all projects showcased at Public Services 2.0 put together had the same budget as a single project of the e-participation European programme. We need rewiring the economy to funnel attention and money towards people like the CriticalCity boys and girls, who dream (realistic) dreams of building resources for everyone to use, that for this very reason are difficult to monetize. It is difficult, but not impossible, and we need to do it. I’m going for it. I hope – and I believe – I will not walk this path alone.

In my early foray into computer graphics in the late 80s I came across Symbolics, a spinoff of MIT AI Lab doing (among other things) research in advanced visualization. I was dumbfounded by this video, premiered by Symbolics at SIGGRAPH 1987. How could they achieve their flock of birds  to move in such a natural-looking way? At the time it looked like sorcery: I was a humble economics student in a small town in Italy, with not a chance in hell to grasp the extension of the knowledge wielded by MIT computer whizs. So I put it away in a corner on my mind. Until, in 2009, I chanced on a 1992 book, Mitchell Waldrop’s Complexity, that actually knows the answer to my 22-year old question. Each bird or fish in the flock follows three simple rules of behaviour:

1. It tries to maintain a minimum distance from other objects in the environment, including other birds/fish (Symbolics’ Craig Reynolds called them “boids”).
2. It tries to match velocities with nearby birds/fish.
3. It tries to move toward the perceived center of mass of nearby birds/fish.

The natural-looking flocking behaviour is emergent. As far as the program is concerned, there is no entity called flock: it is just moving about individual boids. Simple rules for local interaction among them produce an elegant and effective collective behaviour.

Wait a minute. This is not so different from what is happening in Kublai. Example: we wanted the community to go and say hello to new members. Of course you cannot issue a decree that this is to happen. So what we did was this: Walter and I, who are friends and also particularly active community members, agreed that we would do it, created a Welcome Group and started doing just that. This produced some sort of flocking behaviour: our “net neighbours” (at least some of them) started imitating us, and joined the group. Soon they developed a more effective way to keep track of who was doing what (after some trial-and-error Pico proposed a widget which everyone was happy with), and their net neighbours started following their example… including the initiators!

Communities are, by definition, impossible to control: but they are certainly possible to influence. This is no rocket science: most of us have some experience of it. This flocking behaviour intuition, if confirmed by analysis, could lead to developing techniques for influencing (not sure “managing” is the appropriate word) social networks based on establishing “islands” of local interactions where certain rules apply, and watching them spread out through the network’s links. Of course where you start matters: it just so happens that Walter and I are by far the most eigenvector central people in Kublai, according to Ruggero.

I am wondering whether this mechanism could somehow help us understand why people seem “too eager” to collaborate in social networks, and why, conversely, oppurtunistic behaviour is a lot less widespread than one would be inclined to think (this remark run in several talks at Public Services 2.0). Cooperation as an emergent property of networks, as opposed to an intrinsic property of individuals?

Public Services 2.0 turned out to be really exciting. Of course I knew most of the projects out there, but it was good to get to meet the people behind them in person and to get their vision behind the projects themselves.

Regularities surfaced. For example, participants in policy-oriented social network are regularly more constructive than you would expect (half the messages in PatientOpinion are to say thank you – this on a highly sensitive government area like the National Health Service and with anonymous posting). Also, most projects emphasize collaboration, but there is a great deal of competition as well; Social Innovation Camp is structured as a beauty contest; we have our own Kublai Award; and everybody does metrics, “karma systems” of some sort to acknowledge active membership of the community. Networks seem to have a number of interesting properties that are emergent: they cannot be well understood just by looking at the level of the participating agent. They sometimes seem to have a will of their own: both Savvy Chavvy and Kublai evolved towards uses quite different from the ones they were designed for.

If networks are entities (I suspect they may in fact be complex systems, and that some of the complexity math could apply) and not just ways to connect nodes, then just what are we are doing here? We are deploying services and doing policy, that’s for sure. It’s not macro policy – we don’t manipulate aggregates like public consumption. And not micro policies either – we don’t tweak incentives for individual agents, like tax rates. It’s meso policy; and that’s a pretty unchartered territory so far. In a policy oriented social network, their creators enjoy in their turn somekind of meso status; we do not wield coercion power (macro), but it certainly cannot be said we are just users among users (micro). We work by meso tools: moral suasion, reputation management, expanding islands of rules for  local interactions that generate “flocking behaviour” (like “when you log in, take a minute to say hello and welcome to the newly registered members”) – hell, even parties in Second Life! It’s an entirely new territory, that must be chartered; and the crowd that David, Lee and Dominic gathered in Brussels seems the most likely candidate to do it. So let’s get down to it!

(More related posts, videos etc. here)

Er… I’m an economist actually, madam. True though, my working tools have been kind of unusual over the latest years, since I started working on the creativity/innovation/development nexus: not only blogs and social networks, but also parties, barcamps and Second Life-Real Life mashups. Much if the stuff I do feels right, and a lot of it goes surprisingly well, but it is by no means easy being confident that I really am getting it right, and that I am not missing out important opportunities simply because I do not see them. The economics I studied at college does not help me in this; nor do the intellectual contributions picked up along the way, from game theory to new economic geography, from the regional analysis of innovation à la Saxenian to public choice theory, important as they are. And when you find itself spending taxpayer money to improve your Second Life avatar to generate credibility (ok, that was about five dollars, but it’s the concept that matters), well, then it’s time to update your theoretical framework.

I looked around for a few years and I think I have spotted a promising thread in complexity economics. It is the attempt to apply to the economic domain a conceptual framework that developed in completely different disciplines, from biology to meteorology, in which the classic approach based on reductionism and determinism was not yielding results. Though this approach can be traced back to – surprise surprise – Viennese school economists, Von Hayek in particular, the birthplace of the concept of complex system is generally thought to be the Santa Fe Institute. So I started to hang out with David A. Lane, who worked in Santa Fe and now teaches in Italy, and to exchange some thoughts with him. Lately we have been speaking a lot about Kublai, and two of his students are trying to conceptualize the Kublai social network as a complex system: the approach seems interesting, we’ll see what comes out of it.

Meanwhile I have started to read Complexity Perspectives on Innovation and Social Change, by David and others (forthcoming). Compared with his articles of the late 90s and early 2000s there is a noticeable development: the “complexity approach” of that time is turning into a full-fledged economic theory. And it accounts for something that IMHO badly needs accounting for: namely, that technical innovation does not exist. What does exist in innovation, that happens in the agents-artifacts-culture space, and that involves people, modes of interaction, new artifacts and the set of attributions concerning all of the above. Technology is a part of this, and it does not make sense analytical sense to separate it out from the whole.

For a plain, rank-and-file economist like myself, spoonfed on Keynes and Edgeworth, reading this stuff is like going on some kind of psychedelic trip. I read of “Darwinian accounts”, “funcional orthogonality”, “agent-artifact space”, “attributional shifts” and even “exaptive bootstrapping dynamics” – a locution which I have not even been able to translate into Italian – until my brain starts to smoke like on old, overheated engine. But it’s good, very good, and well worh the effort. And I can’t help thinking – with some kind of warped professional pride – that David teaches in a department of economics: there must be something right in a discipline that can question itself so deeply, and to keep on giving me, after twenty odd years, new stimuli.