Evolution of

Complex
Systems
Lecture 12: 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
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
 E.g., key, ball, book
Services
 Temporary changes in the
environment produced by human
communications
 E.g., hair dressing, cloth tayloring
Exchanging products and
services
 Economic communications:
communications about exchanging
products and services
 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
 Politicalsystem 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 refer frequently to 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
 Veryimportant 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
1. Is it true that the money is a form of
economic communications ?
2. Is it true that the logic of economics is:
is this communication leading to more
or less money ?
3. Is it true that deflation is a form of
economy acting on politics changing
its rules ?
4. 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 ?